Independent professional advice for executors who need businesses valued for probate and to manage any inheritance tax exposure on the estate.
The process of obtaining probate and administering and distributing the deceased’s estate can add to the stress caused by the loss of a friend or family member. And it can delay the distribution of the estate.
It’s important to get it right as the estate’s executors are responsible for notifying the correct value of the deceased’s estate to HM Revenue & Customs (‘HMRC’). This drives the calculation of any Inheritance Tax (‘IHT’) due, and the courts will only grant probate, if HMRC are satisfied that all tax due, including IHT, has been paid.
Business assets that the deceased owned at their date of death, are likely to form a significant element of the overall Estate, so they need careful consideration by probate and valuation specialists. Valuing the shares in a private company or an interest in a business can be difficult. The shares are not quoted and so the executors have no market they can refer to for a valuation of the business. So how much are the shares worth? The answer is not simple and so they need careful consideration by probate and valuation specialists.
Establishing an accurate value is important to minimise the amount of inheritance tax (IHT) owed and to give confidence to the executors of the Estate. A specialist valuer, with experience of formulating business valuation opinions in a probate process, is critical. Even if no IHT is at stake, or full Business Property Relief (‘BPR’) is available, agreeing a valuation is still vital, because it establishes beneficiaries’ base cost for Capital Gains Tax (‘CGT’). This affects the amount of CGT the beneficiaries will pay if they sell the asset later.
PEM Corporate Finance has experience of valuing businesses with different ownership structures, in a multitude of industry sectors, of various sizes and maturity. We can provide executors (either directly or through their chosen solicitor) with a timely, well-reasoned and robust valuation. This can help ensure that probate is granted without delay allowing the estate to be distributed efficiently.
Are you a probate solicitor or executor with questions about valuing a business? Get in touch for an informal chat – every call is treated as confidential and there are no obligations attached. We’re here to be helpful.