What is Open Market Value?
With regards to valuations, you will be concerned with the assets OMV, the price it might reasonably fetch if it was sold on the open market at the time of the transfer of that asset. This represents the realistic selling price, as opposed to the insurance or replacement value. In other words; an item is worth what someone would be willing to pay for it. In terms of property, this is in accordance with the RICS Red Book guidelines.
Jointly Owned Assets
These are treated differently depending on the nature of the asset and who the co-owner is. For example, when dealing with a jointly owned home, co-owners could be joint tenants or tenants in common. In the first instance, under the right of survivorship, ownership will pass directly to the survivor and the share will not form part of the estate. While in the latter case, the share of the property will be included in the estate. If a joint share is owned by someone who is not the deceased`s partner, a 10% deduction in value is allowed due to the difficulties that can arise in selling a half share.
Probate Property Valuation
The most valuable assets in an estate are usually the family home and any investment property so it`s important to get it right. To ensure you get an accurate valuation you should use a RICS Chartered Surveyor. The fees for this can be deducted from the estate later. A professional market valuation will take into account market conditions and the condition of the property and necessary repairs.
It is extremely important to ensure your house is not overvalued in the current climate as this will result in unnecessary inheritance tax liability. Also, HMRC are more likely to accept a valuation if it is presented by a professional. If you find you have over or under valued a property, you must contact the Inland Revenue immediately.