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To find out if there鈥檚 Inheritance Tax to pay, you need to value the money, property and possessions (鈥榚state鈥�) of the person who鈥檚 died.

You must do this before applying for probate (if you need it).

You need to complete 3 main tasks when you value the estate.

1. Identify the deceased鈥檚 assets and debts such as savings, investments, mortgages and loans.

2. Estimate the estate鈥檚 value. This will affect how you report the value, and the deadlines for reporting and paying any Inheritance Tax. Most estates are not taxed.

3. Report the value of the estate - how you do this depends on whether you need to send full details of the estate and its value.

How long it takes

Valuing an estate can take several months, but it can take longer if it鈥檚 a big or complicated estate (for example if it involves trusts or there鈥檚 tax to pay).

Deadlines

There are only deadlines if the estate owes Inheritance Tax.

If it does, you鈥檒l need to:

• start paying tax by the end of the sixth month after the person died, and before you apply for probate - you can make a payment before you finish valuing the estate
• send Inheritance Tax forms within one year

Getting help

You can hire a professional (for example a solicitor) to help with some or all of the tasks involved with valuing an estate.

Money Helper has guidance on . Law Donut has advice on .

Before you can value the deceased鈥檚 money, property and possessions (their estate), you鈥檒l need to identify the things they owned (their assets) and their debts.

Assets include things like bank accounts, savings and pensions, as well as property, household goods and personal items.

Debts include things like utility bills, mortgages and money owed on credit cards. They also include funeral expenses, such as the cost of a funeral director, a headstone or plaque and refreshments.

You鈥檒l then need to:

• find out which organisations to contact (you can do this by searching through the deceased鈥檚 papers or asking friends, family and any solicitor or accountant they had)
• write to these organisations asking for the value of the asset or debt when the person died (you鈥檒l need to include a copy of the death certificate)

Which organisations to contact

Organisations that hold a person鈥檚 assets often include:

• their bank
• their pension provider - ask if you should include any private pension when you value the estate
• their employer - the person may be owed wages
• any companies they held shares in - include the number of shares, company details and the share certificate number (if you have it)
• National Savings and Investments (NS&I) for Premium Bonds - use the if you cannot find certificates
• other organisations that hold assets like ISAs, shares, investments or assets in a trust
• their landlord, if they had one - the person may have paid rent in advance

In your letter to the bank, also ask for:

• any standing orders and direct debits to be stopped (or transferred if they were in a joint name)
• a list of any share certificates or deeds they were holding for the person who died

If the person had a mortgage

Ask the mortgage lender if they require payments to continue while you鈥檙e applying for probate. If they do, you need to either:

• pay these bills yourself - and reclaim them from the estate once you鈥檝e got probate
• check if the person had a life assurance or mortgage protection policy that covers these payments

You need an estimate of the estate鈥檚 value (the deceased鈥檚 money, property and possessions), to find out if there鈥檚 Inheritance Tax to pay.

There鈥檚 normally no Inheritance Tax to pay if either:

• the value of the estate is below the 拢325,000 threshold
• you leave everything above the 拢325,000 threshold to your spouse, civil partner, a charity or a community amateur sports club

If the person who died was widowed or is giving away their home to their children, the tax threshold can be higher.

Working out your estimate

You need to estimate the total value of the estate. This includes:

• the value of the things the person owned (their assets) on the day they died
• any gifts they made, such as cash or items of value, in the 7 years before they died
• the value of any trusts where the person had a beneficial interest

Your estimate will help you check if the estate鈥檚 value exceeds the threshold. If it does, you鈥檒l need to provide valuations for the assets to see how much Inheritance Tax is due.

You can work out the estimate yourself or you can use the Inheritance Tax checker.

Check if you need to pay Inheritance Tax

The tool will:

• give you an approximate value of the estate

• help you decide whether any Inheritance Tax is likely to be due or not

The tool does not:

• calculate the amount of Inheritance Tax due

• tell HMRC about the estate鈥檚 final value

Before you start, you鈥檒l need the following information:

• details of the person鈥檚 assets, including joint assets
• details of any gifts they made

Valuing the assets

Start by listing the person鈥檚 assets - things belonging to them with a financial value. Then find out or estimate the value of each on the date the person died.

These may include:

• their home

• any other properties, buildings or land

• money in banks, building societies or ISAs, or cash in their home

• stocks and shares聽

• household and personal items, including antiques, electrical goods, furniture, jewellery, paintings, and stamp collections

• cars, caravans or boats

• foreign assets, such as property abroad

• money they鈥檙e owed, for example, wages or refunds from household bills

• payments when they died, for example, life insurance or a lump sum 鈥榙eath benefit鈥� from a pension

For things like bank accounts, ISAs and pensions, you should contact the relevant organisation to get an exact figure.聽

For items such as cars, jewellery, and paintings, work out how much you would have got if you鈥檇 sold them. You can search for similar items on online marketplaces for this.

Valuing joint assets

You need to find out what assets the person owned with someone else and how they were owned.

The rules for valuing joint assets, such as property, jewellery or paintings, are different depending on whether they were owned as:

• 鈥榡oint tenants鈥� (known as 鈥榡oint owners鈥� in Scotland)
• 鈥榯enants in common鈥� (known as 鈥榗ommon owners鈥� in Scotland)

Joint tenants

Joint tenants automatically pass on any assets, such as land or property, to the other owners if one of them dies.

If the asset, such as land or property, was owned as a joint tenant with the person鈥檚 spouse or civil partner, divide the value of the asset by 2.

If land or property was owned with other joint tenants, for example friends or siblings, do both of the following:

• divide the value by the number of owners
• take 10% from the share of the person who died

In Scotland, if land or property was owned jointly with others (excluding a spouse or civil partner), take 拢4,000 off the value of the whole asset before working out the deceased鈥檚 share.

To value a joint bank account, divide the amount by the number of account holders, unless it鈥檚 in joint names for convenience only. For example, an older person may add their child to help them with the account. If so, use the amount the deceased actually owned instead.

Tenants in common

The rules are different for tenants in common as they do not automatically pass on any assets they jointly own.

If the deceased jointly owned property or land as a tenant in common, work out the value based on their share.

Working out the value of any gifts

You need to work out the value of any gifts made by the person who died.

Gifts only count towards the value of an estate if they were made in the 7 years before the person died and the total value of the gifts was over the 拢3,000 annual exemption.

Any gift a person continued to benefit from before they died also counts towards the value of an estate - for example, if they gave away a house but lived in it rent-free (known as a 鈥榞ift with reservation鈥�).

There鈥檚 no Inheritance Tax to pay on gifts to charities or political parties.

What counts as a gift

A gift can include:

• money
• household and personal goods, for example, furniture, jewellery or antiques
• a house, land or buildings
• stocks and shares listed on the London Stock Exchange
• unlisted shares held for less than 2 years before the person鈥檚 death

Checking for gifts

You can check for gifts by:

• going through bank statements
• talking to family members
• looking through financial documents

Record the value of any gift and the date it was made.

Estimate the gift鈥檚 value

To estimate the value of each gift, use either:

• the approximate value of the gift at the time it was made (realistic selling price)
• the realistic selling price of the gift if the deceased continued to benefit from the gift after giving it away (a 鈥榞ift with reservation鈥�)

Debts

Do not include the estate鈥檚 debts when you estimate the gross value. You will however need to tell HM Revenue and Customs (HMRC) about any debts when you report the value of the estate.

Check for records of debts when the person died, for example:

• their mortgage, loans, credit cards or overdrafts
• 鈥榣iabilities鈥� like household bills or bills for goods or services they鈥檇 received but not yet paid for (like building work, decorators, accountants)

What to do next

Check if you need to send full details of the estate鈥檚 value.

Before you report the value of the estate (the deceased鈥檚 money, property and possessions), check if you need to send full details of the estate so that you complete the correct forms.

The information you need to provide and how you do this depends on a number of factors, including whether Inheritance Tax is due or not.

If Inheritance Tax is due

You鈥檒l need to give full details of the estate if Inheritance Tax is due.

You can use the online checker tool to find out if Inheritance Tax is due.

Find out what you need to do if Inheritance Tax is due.

When to send full details of the estate鈥檚 value even if no tax is due

You鈥檒l need to send full details of the estate, even if no tax is due, if the person who died:

• gave away over 拢250,000 in the 7 years before they died
• gave gifts then continued to benefit from them in the 7 years before they died
• left an estate worth more than 拢3 million
• was 鈥榙eemed domiciled鈥� in the UK
• had foreign assets worth more than 拢100,000
• was living permanently outside the UK when they died but had previously lived in the UK
• had a life insurance policy that paid out to someone other than their spouse or civil partner and also had an annuity
• had increased the value of a lump sum from a personal pension to be paid after their death, while they were terminally ill or in poor health
• had agreed that property they鈥檇 given away during their lifetime would be part of their estate rather than pay a pre-owned asset charge

If the estate includes trusts

You鈥檒l need to complete a full account if the deceased:

• gave gifts that were paid into trusts
• held assets worth over 拢250,000 in trust
• held more than one trust

You鈥檒l also need to complete a full account if assets held in trust passed to a surviving spouse, civil partner or charity and the trust was worth:

• 拢1 million or more
• 拢250,000 or more after the amount passing to the surviving spouse, civil partner or charity has been deducted

When full details are not needed - 鈥榚xcepted estates鈥�

You do not have to give full details of an estate鈥檚 value if all of the following are true:

• the estate counts as an 鈥榚xcepted estate鈥�
• there鈥檚 no Inheritance Tax to pay
• you鈥檝e checked that none of the reasons under 鈥榳hen you need to send full details of the estate鈥檚 value even if no tax is due鈥� apply

Most estates are excepted estates.

What counts as an excepted estate

An estate is usually an excepted estate if any of the following apply:

• its value is below the current Inheritance Tax threshold
• the estate is worth 拢650,000 or less and any unused threshold is being transferred from a spouse or civil partner who died first
• the deceased left everything to a spouse or civil partner living in the UK or to a qualifying charity and the estate is worth less than 拢3 million (search the charity register for registered UK charities)
• the deceased was living permanently outside the UK (a 鈥榝oreign domiciliary鈥�) when they died and the value of their UK assets is under 拢150,000

What you need to do next

The process you need to follow depends on whether you鈥檙e dealing with:

• an estate where a full account is needed
• an excepted estate

Dealing with an excepted estate

You can report the value of an excepted estate if you apply for probate. Check if you need probate and apply for it if you do.

You do not need to report the value of an excepted estate if you do not need probate.

Applying for probate in Scotland or Northern Ireland

There鈥檚 a different way to apply for probate if the deceased or .

If you need help with probate or the value of the estate

Contact HM Courts and Tribunals Service if you鈥檙e not sure if you鈥檒l need probate or if the value of the estate changes.

If you need help with Inheritance Tax

Contact HM Revenue and Customs for questions about Inheritance Tax.

You must report the value of the estate to HM Revenue and Customs (HMRC) by completing form IHT400.

You must submit the form within 12 months of the person dying.

Getting accurate valuations

You鈥檒l need to give accurate valuations when you complete the form.

You can get any property or land valued by an estate agent or chartered surveyor.

You can also get a professional valuation for anything worth over 拢1,500.

You can estimate the value of cheaper assets, such as electrical items and ordinary household goods.聽

For things like cars, jewellery, and paintings, work out how much you would have got if you鈥檇 sold them. You can search for similar items on online marketplaces for this.

Report the value of the estate by completing form IHT400

You need to download and complete form IHT400. Send it to the address on the form.

You can read guidance on how to complete form IHT400.

You can ask HMRC to work out how much Inheritance Tax is due if you鈥檙e filling in the form without the help of a probate professional, such as a solicitor. You can do this when you fill in the form.

If you need help completing the form

Contact HMRC鈥檚 Inheritance Tax helpline for help with completing form IHT400.

How to amend a form after it鈥檚 been submitted

You need to fill in a corrective account form and send it to HMRC if you need to make any changes to information you鈥檝e already submitted.

Paying Inheritance Tax

You must pay Inheritance Tax by the end of the sixth month after the person died. For example, if the person died in January, you must pay Inheritance Tax by 31 July.

You can pay in yearly instalments on certain things that may take time to sell, such as a house.

You鈥檒l need to get an Inheritance Tax reference number from HM Revenue and Customs (HMRC) at least 3 weeks before paying any tax.

When you can apply for probate

Once you鈥檝e sent your completed IHT400 form to HMRC, you need to wait for HMRC to send you a letter with a code before you apply for probate.

You must keep certain records after you value an estate.

You must keep copies of any:

• will
• copies of signed Inheritance Tax forms and supporting documents
• records showing how you worked out the value of assets in the estate, for example an estate agent鈥檚 valuation
• documents showing any unused Inheritance Tax threshold that can be transferred to a surviving spouse or civil partner
• final accounts

Final accounts

Include any documents showing how you distributed money, property or personal belongings from the estate, for example:

• letters from HMRC confirming that you paid Inheritance Tax
• receipts showing debts paid, for example utilities bills
• receipts for your expenses from dealing with the estate
• written confirmation that 鈥榖eneficiaries鈥� (anyone who inherited) received their share of the estate

Send copies of the final accounts to all beneficiaries.