To value property for Confirmation, you first need to understand how the ownership is defined in the property deeds. Sometimes property needs to be included in the Confirmation value, but sometimes it passes automatically to someone else and does not need to be included. There are also specific tax exemptions that only apply to property.
When you can estimate property value
A reasonable estimate of the property’s value is usually fine if you are not likely to need to actually pay Inheritance Tax (IHT), even if you still need to complete the inheritance tax form (IHT400).
There are various ways to estimate a property value:
check recent sale prices of similar properties in the local area
ask a local estate agent for a rough market appraisal
use online tools like GetAgent
If the property is to be sold it is often best to choose the higher end of the range. This reduces the risk of Capital Gains Tax (CGT) on a later sale.
If a spouse or beneficiary will continue to live in the property as their main home, you don’t need to think about CGT.
When you need a professional valuation
If you need to pay Inheritance Tax, or if you are claiming the residence tax exemption (‘residence nil rate band’), it is best to get a valuation from a surveyor registered with the Royal Institution of Chartered Surveyors (RICS).
This avoids HMRC challenging the figure later, which can cause delays.
You only need to get one professional valuation.
Joint ownership and survivorship
If a property was jointly owned, and at least one owner is still alive, you need to check the title deeds for a ‘survivorship clause’. If the word ‘survivor’ is written into the title then it normally means there is a ‘survivorship clause’.
With survivorship
If there is a survivorship clause, the deceased person’s share passes automatically to the surviving owner, regardless of what their Will says (or what the law says when there is no Will). It doesn’t go into the total for Confirmation, but you must still include its value for Inheritance Tax purposes, and declare it in the Confirmation application.
Exceptions
There are two exceptions to a deceased person’s share automatically passing when there’s survivorship:
If the two owners signed a document called an ‘evacuation of survivorship’, this cancels the survivorship. When people do this, it is often to protect part of the home from being taken for care costs.
If the owners were married at the time of purchase and subsequently got divorced, the divorce automatically cancels the survivorship.
In these exceptions, when the first owner dies, you must include their share in the estate for Confirmation.
Without survivorship
If there is no survivorship clause, the deceased person’s share must be included for Confirmation so that the title can be transferred or the property sold. If both owners are deceased, you need Confirmation for both estates. We offer a discount if we do two applications at the same time for a married couple.
Get in touch with us if you think this applies to you.
Working out the share
Unless a specific split is defined in the property deeds, you should divide the value of a property equally among owners.
For joint ownership in Scotland with someone other than a spouse or civil partner, you can deduct £4,000 from the total property value before dividing.
Mortgages, shared equity, and rental income
For Confirmation, the property must always be listed at its full open-market value on the date of death. Any outstanding mortgage or shared equity scheme (such as the Scottish Government’s LIFT scheme) is shown separately as a debt.
The value for Confirmation is not affected by:
mortgage payments made after the person died.
rental income received after the person died.
What matters is the market value of the property itself. If there is a sitting tenant, that can reduce the property’s open-market value. An estate agent or surveyor can reflect this in their figure.
Gifts of property and trusts
If the person gave away their home, or put it into a trust, but continued to live there without paying market rent, this is known as a ‘gift with reservation of benefit’.
The property is still treated as part of their estate for tax purposes, and you’ll need to submit a full Inheritance Tax application. We offer a fixed-price tax forms service that can help you with this.
If a trust was set up without the person continuing to benefit, contact the solicitor or company managing the trust and ask whether you should include it in their estate.
How our service helps
As part of our fixed-fee service, we can:
check the title deeds to confirm how the property is owned
check for complex scenarios, such as uncompleted title updates, so nothing is missed
work out what values are needed for both Confirmation and Inheritance Tax
ensure your application is drafted correctly so there are no problems dealing with the property
If your situation turns out to be more complex, you can upgrade to a different package or use our money-back guarantee.