What Is a Probate Valuation?
A probate valuation establishes the monetary value of a deceased person's possessions at the date of death. This valuation forms part of the estate's Inheritance Tax (IHT) return and is used to calculate any tax owed to HMRC.
The valuation must reflect Open Market Value (OMV) — the price an item would reasonably fetch if sold on the open market, typically at auction. This is distinct from insurance replacement value, which is usually higher.
For any single item worth over £1,500, HMRC requires the valuation to be carried out by a suitably qualified professional. Below this threshold, executors may provide their own reasonable estimates, though professional valuations are still advisable for items of uncertain value.
When Do You Need a Probate Valuation?
A probate valuation is needed whenever you are applying for a Grant of Probate or Letters of Administration. It is particularly critical when:
- The estate exceeds the Inheritance Tax threshold (currently £325,000, or £500,000 if the residence passes to direct descendants)
- The estate contains any single item worth over £1,500
- You are uncertain about the value of particular items
- The estate includes specialist assets such as art, antiques or classic cars
Inheritance Tax must be paid within six months of death, even if probate has not yet been granted. This creates a practical urgency to obtain valuations promptly.
Open Market Value vs Insurance Value
One of the most common mistakes executors make is using insurance valuations for probate purposes. The two serve fundamentally different functions:
| Open Market Value (Probate) | Insurance Replacement Value |
|---|---|
| What the item would sell for at auction | Cost to replace with a like-for-like item |
| Typically lower | Typically higher |
| Required by HMRC | Required by insurers |
| Reduces estate tax liability | May overstate estate value |
Using insurance values for probate can result in overpaying Inheritance Tax — sometimes by thousands of pounds. Always ensure your valuer understands the distinction and provides an Open Market Value assessment.
Qualifications to Look For
HMRC does not prescribe specific qualifications for probate valuers, but they expect valuations from individuals with demonstrable expertise. Look for membership of recognised professional bodies:
- NAJ (National Association of Jewellers) — for jewellery and watches
- IRV (Institute of Registered Valuers) — for jewellery and personal chattels
- RICS (Royal Institution of Chartered Surveyors) — for property, fine art and antiques
- Gem-A (Gemmological Association of Great Britain) — for gemstones and precious stones
Professional body membership ensures the valuer carries appropriate professional indemnity insurance, follows a code of conduct, and maintains their expertise through continuing professional development.