The family home is often the largest asset in the estate of someone who has died, and obtaining an accurate “date of death” valuation is crucial – HMRC can and do check that such valuations are appropriate.

Sorting out valuations at an already difficult time can feel burdensome, but with the right approach and advice it is possible to manage this process confidently and avoid unnecessary delays or costs.

Why property valuations are important in estate administrations

When someone dies, the value of their estate must be calculated to determine whether Inheritance Tax (IHT) is payable. Property is often one of the most valuable assets in an estate, so getting the valuation right is essential.

The valuation must reflect the open market value at the date of death, meaning the price the property would reasonably have achieved if sold at that time.

If the value is too low, there is a risk that insufficient tax is paid. If it is too high, the estate may pay more tax than necessary. Either way, HMRC expects the figures to be accurate and properly supported.

Scrutiny from HMRC

HMRC’s Valuation Office Agency (VOA) may query how a valuation was reached, request supporting evidence, and challenge valuations that appear inconsistent with market data.

If HMRC is not satisfied, it can open an enquiry and propose a revised valuation. This can lead to delays in administering the estate and, in some cases, additional tax, interest, or penalties.

Informal valuations

In some estate administrations, a quick and cost-effective option is for families to obtain informal estimates from local estate agents.

Estate agent appraisals are typically designed for marketing purposes rather than formal tax reporting. The appraisals may be based on anticipated sales prices, which may not be identical across all agents.

RICS property valuations

RICS stands for the Royal Institution of Chartered Surveyors, a professional body that sets standards for property professionals.

A valuation from a RICS surveyor is generally considered the safest and most reliable approach. It offers greater credibility with HMRC, clear supporting evidence, reduced risk of challenges, and peace of mind for executors.

A RICS-qualified surveyor is trained and regulated to provide independent, evidence-based property valuations. They must follow strict professional guidelines, ensuring their reports are objective, supported by market data, and prepared to recognised standards.

Estate agent valuations vs RICS valuations

In some estate administrations, it may be appropriate to rely on estate agent valuations, but this depends on the circumstances of the estate and the level of risk involved.

Estate agent valuations may be suitable where:

• the estate is clearly below the Inheritance Tax threshold and no IHT is payable
• the property is a standard residential property with good comparable evidence
• there is no dispute between beneficiaries
• the property is likely to be sold shortly after death, providing supporting evidence of value

However, even in these cases, the valuation must still reflect a genuine open market value at the date of death and be capable of being justified if queried.

A RICS valuation is recommended where:

• Inheritance Tax is payable or the estate is close to the threshold
• the property is unusual, high value, or difficult to assess (for example, listed buildings or properties with development potential)
• there is any disagreement between beneficiaries
• there is a higher risk of HMRC scrutiny or challenge

If a solicitor is assisting you with the process, they will be able to advise you on the best approach.

When should you obtain a valuation?

Ideally, a valuation should be obtained as early as possible in the estate administration, once access to the property is available. This helps ensure accuracy and avoids delays.

How Mercers can help

Administering an estate involves a number of legal and practical steps. We can advise on valuations, connect you with trusted professionals,, handle probate applications, and deal with HMRC queries on your behalf.

If you are dealing with an estate and would like advice on Estate administration matters, our private client team is here to help. Please contact us to discuss your situation and find out how we can support you.