16th December 2021

Confirmation and Valuations: some useful guidance

What is Confirmation?

Confirmation is a document granted by the Court which legally “confirms” the Executors appointed in the deceased’s Will, or, if the deceased died “intestate” (without leaving a Will), the Executor(s) who are appointed by petition to the Court under the Laws of Intestate Succession in Scotland.  In England, Confirmation is called “Probate”.

When is Confirmation required?

There are a number of circumstances where Confirmation is required when administering an estate. It could be to complete the transfer or sale of the deceased’s house, ingather funds from bank accounts, investments or for the sale or transfer of shares. Each institution has its own rules and thresholds for when Confirmation is required.  If an estate is relatively modest, Confirmation may not be required.

Accurate valuations & why they are required

The application for Confirmation contains a list of assets (called an “inventory”).  This details assets the deceased owned, along with their values as at the date of death. The Executor must be happy to sign off the HM Revenue & Customs (“HMRC”) declaration in the Confirmation application confirming that what is listed in the inventory is an accurate reflection of what the deceased owned, and the values of what was owned, as at the deceased’s date of death. If the estate is liable to pay inheritance tax (“IHT”), accurate valuations of assets will enable the correct amount of IHT to be paid. An aside to this is that if a spouse/child is making a Legal Rights claim against the estate, all values have to be accurate in order to calculate the claim correctly.

How are valuations obtained?

For banks and investments, the asset holder will provide the date of death valuation.  For shareholdings, it is best practice to obtain what is called a “one-quarter up” value of the shares as at date of death. If there are multiple shareholdings, instructing a professional company to provide a valuation is advisable. In terms of heritable property (i.e. the deceased’s house), a professional valuation is also recommended. A surveyor is best placed at estimating the market value of a property as at the date of death. Contents and personal belongings may also be valued by a professional valuer (i.e. an auctioneer), and this is particularly important when there are items of significant value such as paintings, antiques or classic cars.

Taxable estates

In a taxable estate (where IHT is payable), HMRC will likely request sight of professional valuations to substantiate the information declared to them in the IHT account, which is submitted to them prior to the application for Confirmation being made to the Court.

How long does it take to obtain Confirmation?

This depends on the complexity of the estate being administered. In a straightforward estate, Confirmation may be obtained in around 3-4 months. If an estate is taxable, or has a large number of assets, it will usually take at least 6 months to obtain Confirmation. Where HMRC are involved in an estate, they can take at least several months to assess the IHT account before Confirmation can be applied for. The Court will issue Confirmation roughly 2-8 weeks upon receipt of the application, depending on which Court is involved. Once Confirmation is granted, the Executors can ingather and distribute assets in line with the terms of the Will or, per the Intestacy rules which apply when someone dies without leaving a Will.

If you need any advice about executry administration, get in touch with the Blackadders’ Private Client Teams working in Aberdeen, Dundee, Edinburgh, Glasgow, Perth and across Scotland.

Sienna Sproson, Associate Solicitor
Private Client
Blackadders LLP

www.blackadders.co.uk

 

 

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