Why you need to value the estate
Valuing the estate is one of the main jobs for executors, and it tells you how to go about the rest of the estate administration process.
For instance, once you know the value of the estate, you will know:
if the Sheriff Court can help you with Confirmation for free (estates under £36,000)
if you need to hire a solicitor (such as when there’s no Will and the estate is worth over £250,000)
which forms you need to fill in (such as if you need to make a full accounting of the estate to HMRC)
how much Inheritance Tax you need to pay (only needed in around 5% of estates)
What’s included in the value of an estate
An estate is made up of everything a person owned at the time of their death, including their share of any joint accounts or properties.
There are two values of the estate you need to know about: the value for Confirmation and the value for Inheritance Tax.
Confirmation: The gross value of the estate for Confirmation is the total value of everything the person owned on the date of death.
Inheritance Tax: The gross value of the estate for Inheritance Tax includes everything in the total for Confirmation, plus any relevant gifts and the value of some types of trusts.
Assets
Assets include anything of value that the person owned when they died, such as:
property
personal possessions
money, investments, stocks and shares
Even if you’ve already closed some accounts or cashed in policies, you’ll need to include them in the value of the estate.
You should also include any money owed to the deceased person on the date of death. This might include refunds from companies, underpaid benefits or pension payments, or income tax rebates.
Gifts
Gifts are certain types of assets the deceased person gave away before they died.
Gifts count as part of the estate if:
in any 12 month period within the 7 years before the person died, the gifts totalled more than £3,000 per year across all recipients
the deceased person benefited from a gift they made at any time before death. For example, if they gave a house away but lived in it rent-free, or put a gift in a trust – this is known as a ‘gift with reservation’,
the deceased sold anything to a friend or family member for less than it was worth. For example, if the deceased person sold a house to their child for less than the market value, the difference in value will count as a gift.
Debts and funeral expenses
You’ll also need to know the total debts they had. These can include:
unpaid bills
mortgage payments or rent
loans
credit card debts
It is common to also include the funeral costs in the list of debts, including any kind of headstone or reasonable mourning expenses for close family. But you cannot include any other expenses after death, like buying death certificates or paying for a service to help with estate administration (like a solicitor or My Probate Partner).These expenses are still paid from the estate, but are not part of the calculation for valuing the estate.
Debts are not part of the estate’s gross value, but you need the total of all debts for the Confirmation application and calculating Inheritance Tax, if applicable.
Careful consideration should be given to estates where there could be more debt than assets. In this case, we recommend seeking legal advice.
What’s not included in the value of the estate
Often you do not need to include the following in the value of the estate:
life insurance policies that are ‘written in trust’
certain death in service benefits
certain pension lump sums before 2027
Check with the provider if these payments ‘form part of the estate’. From 6 April 2027, pensions will usually be included as part of the estate.
How to value assets
How to value bank accounts
Ask the bank for the date of death value for bank accounts, rather than using the statement value. They should send you this in a letter that includes any interest that accrued to the date of death.
How to value jointly-owned accounts/assets
If the deceased person jointly owned anything with their spouse or civil partner, whether it’s a physical asset like property or a joint bank account, you would normally use half the value as part of the estate.
If they owned property or land equally with others, divide the value by the number of owners. For properties in Scotland, you can take £4,000 off the value of the property/land value before working out their share - this is recommended only if there is a chance of paying Inheritance Tax.
Some bank accounts are only in joint names for convenience. For example, someone might add their adult child to help them with the account. When valuing the account, use the amount the person actually owned, rather than dividing by the number of owners.
How accurate your valuations need to be
In general, you can include estimated valuations for possessions and property if you don’t need to pay Inheritance Tax. If you think you will need to pay Inheritance Tax, you should get professional valuations.
Our guidance on valuing different assets for ways to estimate a value or get it professionally done.