When somebody dies and their estate is being wound up, the Inland Revenue have to be told about the value of their estate even if it is below the limit at which inheritance tax is payable. There is a shorter form for smaller estates but even for those the values have to be given for any bank or building society accounts, shares, houses, cars and so on.
Now and again (and particularly in the larger estates where tax maybe payable) we come across clients who have slightly unusual assets.
For example, we have dealt with an estate in the Cotswolds where there had been a burglary shortly before the death and some very valuable paintings had been stolen. What we had to value in that case was the expected insurance pay-out which was going to replace the value of the paintings. When everything was looked into, it became apparent that the insurance values had not been kept up-to-date and contents worth about £350,000 had only been insured for about a third of that figure. The insurance company only paid a third of the value of the stolen paintings.
In another estate we dealt with for a charming old lady (with unusual interests) we had to track down other specialists in fairly narrow fields to give an opinion on the value of a large collection of antique firearms (not all of which had been deactivated!), and a museum-quality collection of skeletons and bones of mammals, birds and reptiles. The Inland Revenue accepted that the collection, although important to the academic world, was not of great financial value.
Valuers sometimes have to spend a very long time looking at the value of a very small shareholding in a large family business, which may involve taking into account whether the value of properties recorded in the company’s accounts are still realistic enough to date, whether dividends have been paid on the shares and whether the shareholding is enough to stop another shareholder having total control of the business.
The Inland Revenue have a specialist department of valuers themselves, including at least one expert on the value of racehorses, so any values sent in will be subject to scrutiny by the Revenue if there is tax payable on the estate. At the end of the day, any valuation is at best an informed and educated guess; and if later an asset is sold for either substantially more or less than the valuation, the tax returns can be adjusted; however when valuable family heirlooms are passed down the generations without being sold, that sort of correction does not, of course, take place.
Speak to a specialist about unusual assets in a will
For more advice about Probate, you can contact a member of Bray & Bray’s specialist Wills, Trusts and Probate Department using the telephone numbers below.