How do you value an estate for Inheritance Tax? 

When someone passes away, one of the most important steps in estate administration is determining the value of their estate. This is particularly crucial for calculating any Inheritance Tax (IHT) that may be due. If you are a Personal Representative (Executor or Administrator), understanding how to value an estate for Inheritance Tax ensures that you fulfil your legal duties correctly and avoid any penalties. In this article, we explain how to value an estate for Inheritance Tax, the assets involved, and whether it’s better to use professional help or go down the DIY route. 

What needs to be valued 

To calculate Inheritance Tax, you must value everything the deceased owned at the date of death. This may include: 

• Property - The family home and any other real estate owned;
• Bank accounts - Including current, savings, and investment accounts;
• Personal possessions - Such as jewellery, vehicles, antiques, and artwork;
• Shares and investments - Stocks, bonds, and unit Trusts;
• Pensions - In certain cases, where a lump sum is payable to the estate;
• Business interests - Such as sole trader assets or shares in a private company;
• Gifts - Given within seven years before death, which may be liable for IHT.  

Methods for valuing property and shares 

Valuing different types of assets requires different approaches: 

Property 

For residential and commercial properties, you should obtain an open market valuation. This can be done by: 

• Checking recent sale prices of similar properties in the area (e.g., via HM Land Registry or property websites);
• Using a local estate agent or, preferably, a RICS-qualified chartered surveyor for a formal valuation, especially if the property is complex or high value. 

If HMRC challenges the valuation, having professional evidence can be crucial in resolving disputes. 

Shares  

• Quoted shares: The value is typically based on the average of the highest and lowest selling prices on the date of death.
• Unquoted shares (private companies): A professional valuation is usually required, as this can be complex and depends on company performance, assets, and market conditions.  

Dealing with joint assets 

Jointly owned assets can complicate how to value an estate for Inheritance Tax. These might include: 

• Joint bank accounts;
• Jointly owned property;
• Shared investments.

How these are treated depends on how the assets were owned: 

• Joint tenants: The deceased’s share automatically passes to the other owner(s). For IHT, usually 50% of the value is included in the estate.
• Tenants in common: The deceased’s share forms part of their estate and is valued accordingly, based on their ownership percentage. 

Using professionals vs DIY 

When considering how to value an estate for Inheritance Tax, many Personal Representatives face a decision: should they do it themselves or seek professional assistance? 

DIY  

A do-it-yourself approach can work if: 

• The estate is straightforward;
• Property values are easy to determine;
• No unquoted shares or complex Trusts are involved.  

However, it carries the risk of errors, which can lead to HMRC penalties or disputes. 

Using professionals 

Professional valuers, probate specialists, and estate administration companies like Kings Court Trust can: 

• Provide accurate valuations;
• Help manage the entire IHT process;
• Liaise with HMRC on your behalf;
• Save time, stress, and potential legal issues.   

For more complex estates, such as those that include overseas assets, or estates near or above the IHT threshold (£325,000 for individuals in 2025), professional input is often the safer option. 

Final thoughts

Valuing an estate correctly is a critical step in the probate process. Understanding how to value an estate for Inheritance Tax involves identifying all the deceased’s assets, assessing their open market value, and accurately calculating any tax due. While some Executors and Administrators may feel comfortable taking a DIY approach, seeking professional guidance ensures compliance, peace of mind, and often greater accuracy.

At Kings Court Trust, we specialise in making estate administration simple and efficient, so you can rest assured that the estate is handled with care and expertise.