How to Value an Estate for Inheritance Tax

Introduction

When someone dies, you must value their estate — the money, property and possessions they owned — to work out if there's Inheritance Tax to pay and to apply for probate. This involves identifying all assets and debts, getting valuations as at the date of death, and reporting the total value to HMRC if required.

Understanding what you need to do

Valuing an estate involves three main tasks:

1. Identifying all the assets (what the person owned) and debts (what they owed)

2. Estimating the total value of the estate

3. Reporting that value to HMRC, if required

You must complete the valuation before you can apply for probate. The process can take several months, or longer if the estate is large or complex — for example, if it involves trusts or significant Inheritance Tax is due.

Identifying assets and debts

Assets include everything the person owned that has financial value:

• Bank accounts, savings and pensions
• Property, including their home and any other buildings or land
• Household goods and personal items like furniture, jewellery, antiques and electrical goods
• Vehicles, caravans or boats
• Stocks, shares and ISAs
• Cryptoassets such as cryptocurrency or bitcoin
• Foreign assets like property abroad
• Money owed to them, such as wages or refunds
• Payments triggered by their death, including life insurance or pension lump sum 'death benefits'

Debts include:

• Utility bills
• Mortgages and loans
• Credit card balances
• Funeral expenses, including the cost of the funeral director, headstone or plaque, and refreshments

To identify these, search through the person's papers and speak to their friends, family, solicitor or accountant. You'll then need to write to each organisation asking for the value of the asset or debt on the date the person died. Include a copy of the death certificate with your letters.

Which organisations to contact

Contact these organisations depending on what the person owned:

• Banks — request account balances, and ask them to stop (or transfer) standing orders and direct debits. Also ask for a list of any share certificates or deeds they were holding
• Pension providers — ask for the value and whether you should include any private pension in the estate valuation
• Employers — check if any wages are owed
• Share registrars and companies — provide the number of shares, company details and share certificate number if available
• National Savings and Investments (NS&I) — for Premium Bonds. Use their free tracing service if you can't find certificates
• ISA providers and investment platforms
• Landlords — the person may have paid rent in advance

If the person had a mortgage, ask the lender whether payments need to continue while you're applying for probate. If so, you may need to pay these yourself and reclaim them from the estate once probate is granted, or check if a life assurance or mortgage protection policy covers the payments.

Valuing individual assets

You need to value each asset as at the date the person died.

For bank accounts, ISAs and pensions, contact the organisation holding them to get an exact figure.

For items like cars, jewellery, antiques and paintings, work out how much you would have got if you'd sold them on that date. You can search for similar items on online marketplaces to help estimate this.

Include all assets in your valuation, even those left to the person's spouse, civil partner or charity. You won't pay tax on these assets, but they must still be included in the total.

Valuing joint assets

If the person owned assets jointly with someone else — such as property, bank accounts or investments — you need to find out how they were owned, as this affects the valuation rules. Contact the organisation or check the title deeds to confirm the ownership structure.

Estimating the total estate value

Add up the value of all assets, then deduct all debts. This gives you an estimate of the estate's total value.

Your estimate must also include:

• Any gifts the person made in the 7 years before they died (such as cash, jewellery or property)
• The value of any trusts where the person had a beneficial interest

This estimate helps you work out whether the estate exceeds the Inheritance Tax threshold, which is £325,000 for the 2025/26 tax year. There's normally no Inheritance Tax to pay if either:

• The estate's value is below £325,000
• Everything above £325,000 is left to a spouse, civil partner, charity or community amateur sports club

The threshold can be higher if the person who died was widowed or is giving away their home to their children (or grandchildren).

You can work out the estimate yourself or use HMRC's online Inheritance Tax checker. This tool gives you an approximate value and helps you decide if Inheritance Tax is likely to be due. It doesn't calculate the exact tax owed or report the estate's value to HMRC, but you can save and print your results.

Reporting deadlines

How and when you report the estate's value depends on whether Inheritance Tax is due.

If the estate owes Inheritance Tax, you must report its value within one year using form IHT400. You cannot apply for probate until you've done this.

You must pay any Inheritance Tax by the end of the sixth month after the person dies to avoid paying interest. You'll normally have to start paying before probate is granted.

Getting professional help

You can hire a solicitor or other professional to help with some or all of the valuation tasks. This can be particularly useful for complex estates involving property, shares, trusts or foreign assets.

Sources

• How to value an estate for Inheritance Tax and report its value

This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.