We prepare probate valuations of business interests and unquoted shares for executors, personal representatives and their solicitors and accountants, and assist if HMRC later raises questions about the figure.
When is this valuation required?
- An estate includes shares in a family or owner-managed company.
- The deceased was a sole trader or partner, or held an LLP interest.
- Executors need a figure for the inheritance tax account.
- Beneficiaries or executors need to understand the value before deciding whether to sell or retain the business.
- HMRC has queried the value included in the estate.
Who instructs us?
- Executors and personal representatives
- Private client and probate solicitors
- Accountants to the estate or the company
What exactly is valued?
The deceased's actual interest at the date of death: a shareholding, a partnership share or a business. The rights attached to the holding, any restrictions on transfer and the position of the remaining owners all affect value. We also note where the death itself affects the business, for example because the deceased was central to its operations.
How is value assessed?
Probate valuations apply market value at the date of death, on the assumptions required by the inheritance tax rules. We value the company or business using the information available at that date, then value the deceased's specific interest, considering control, marketability and the effect of the articles.
Where the business relied heavily on the deceased, the loss of their involvement may be relevant to value. Where a shareholder agreement gives others the right to buy the shares at a set price, that may also be relevant. We work with the estate's advisers on these points.
How the approaches are usually weighed
Typical
- IncomeMaintainable earnings or discounted cash flowUsual starting point
- MarketComparable transactions and companiesCross-check
- AssetAdjusted net assetsWhere relevant
What factors influence the result?
- Date of death
- The fixed valuation date, with later events generally excluded.
- The deceased's role
- Whether the business depended on them personally.
- Size of the holding
- Control, influence or a minority position in the company.
- Agreements between owners
- Options, buy-sell arrangements and pre-emption rights.
- Asset base
- Property and investments held within the company.
What information is required?
- The date of death and the deceased's holding
- Accounts and management information around that date
- Articles of association and any shareholder or partnership agreement
- Information about the deceased's role in the business
- Any correspondence with HMRC
We send a tailored information request once the scope is agreed.
What report will you receive?
We provide a valuation report suitable for the estate's records and for HMRC, setting out the interest valued, the valuation date, the basis of value, the method and the conclusion.
See types of business valuation reports for how the scope of each type differs.
Timing and cost
How long will it take?
Executors work to deadlines for inheritance tax. We can often provide a valuation in time for the account to be submitted if we are instructed promptly and the company's information is available.
How much does it cost?
Fees reflect the nature of the business, the size of the interest and whether the matter is contentious. We agree a fixed scope with the executors or their solicitor.
How our fees are set →Frequently asked questions
What date is used for a probate valuation?
The date of death. The valuation should reflect circumstances and information at that date rather than later events.
Do executors have to get a professional valuation?
Executors must include a proper value in the estate. Where the estate includes unquoted shares or a business interest, a professional valuation is usually the most reliable way to support that figure.
What if the business struggled after the death?
Later events are generally not taken into account, although the consequences of losing the deceased's involvement may be relevant if they were foreseeable at the date of death.
Do you advise on business property relief?
No. Whether reliefs apply is a tax question for the estate's advisers. Our valuation provides the market value they need to apply those rules.
Can you help if the beneficiaries disagree about value?
Yes. We can provide an independent valuation, or act in contentious probate proceedings in an expert capacity if instructed accordingly.
