Avoiding an IHT dispute: how to evidence a probate valuation that holds up

When a District Valuer challenges a probate figure, the burden of proof falls squarely on the executors. HMRC does not need to prove the original valuation was wrong — it needs only to put forward a credible alternative, and the estate must then defend its number with evidence. With probate valuations under closer scrutiny than at any time in recent memory, the way a valuation is prepared has become as important as the figure itself.

A defensible probate valuation begins with the right valuer. The Inheritance Tax Act requires "open market value" at the date of death, and HMRC's published guidance is explicit that valuations should be prepared by a qualified, RICS-registered surveyor working to Red Book standards. A market appraisal from a sales agent — however experienced — is not the same thing, and is increasingly being set aside by the DVS as inadequate. Phillip Arnold Auctions, working alongside our team, brings the qualified expertise and the transactional evidence that the DVS recognises.

Comparable evidence is the next pillar. The strongest valuations cite three to five genuinely comparable sales — similar property type, similar location, similar condition, and ideally completed within three to six months either side of the date of death. Asking prices are not evidence; only achieved sale prices carry weight. Where the subject property has unusual characteristics — a short lease, structural issues, restrictive covenants, or development potential — these must be addressed explicitly, with adjustments quantified rather than merely asserted.

Condition is the area where executors most frequently come unstuck. A property in poor repair may genuinely be worth significantly less than its refurbished neighbours, but the DVS will only accept that discount if it is properly documented. A photographic schedule, a building surveyor's report, or contemporaneous quotes for essential works all strengthen the case. Without such evidence, the DVS will assume average condition and price accordingly.

Where there is genuine uncertainty about value — for example with a property that has development angles, sits in a thin market, or attracts primarily investor interest — an auction sale shortly after probate can be the cleanest evidence of all. The hammer price, achieved in an open and competitive forum, is the open market value by definition. For estates likely to face DVS challenge, this can convert a potential dispute into a closed matter.

Finally, executors should retain every piece of supporting evidence on file for at least six years after probate is granted. HMRC enquiries can be opened years after the event, and the file you build today is the defence you will rely on tomorrow.

If you are preparing an estate for probate and want to ensure the valuation is robust, defensible, and aligned with current DVS expectations, The cost is modest; the protection is considerable.

Back to News