News and Events

Valuing land and property for Inheritance Tax

View profile for Lee Young
  • Posted
  • Author

Any land and buildings owned when someone dies are considered part of their estate for Inheritance Tax. The Inheritance Tax threshold for the tax year 2010-11 is currently £325,000. Inheritance Tax is also payable on some gifts – but not all – made by the deceased.

It is essential to get an accurate valuation of land and property and this should reflect the value at the time of death. To work out the value of someone’s estate you will need to value all property and land owned by the deceased. This could include:

  • Their home
  • Any other houses or property owned by them
  • Business properties
  • Farms and land
  • Woodland, derelict land and lock-up garages
  • Any rights attached to the land – fishing or shooting rights.

If the deceased used some or all of the property for business purposes, tax relief is available depending on what the property was used for. The types of relief include business, agricultural and woodland relief. Our qualified legal team can advise you on the best way to avoid tax liabilities.

Some gifts made by the deceased, particularly any made more than seven years before death are exempt from tax. Other exempt gifts include: 

  • Gifts made to a husband, wife or civil partner (provided they have a permanent home in the UK)
  • A charity that ‘qualifies’ and is established in the EU
  • Any UK political party that has at least two elected members.

Head of our Private Client Team, Lee Young, concludes “Gifts made to an unmarried partner or a partner not in a registered civil partnership, are not exempt. This a complex area of law and our team will be happy to advise you on planning in the most tax efficient way.”