Probate & IHT share valuation executors can rely on
Independent open-market valuations of unquoted UK shares for inheritance tax returns and estate administration - defensible, IHT400-ready and delivered in 5 working days.
- IHT400 & IHT412 ready
- Minority discount & DLOM applied
- Section 160 IHTA 1984 basis
- Executor & solicitor-ready pack
What is a probate share valuation?
When someone passes away holding shares in a privately owned UK company, the executors of the estate must report the open-market value of those shares on form IHT400 (with the detail set out on supplementary form IHT412). The valuation directly drives the inheritance tax payable by the estate and forms part of the legal record of the administration.
Section 160 of the Inheritance Tax Act 1984 defines open-market value as the price the asset would fetch if sold on the open market at the date of death, assuming a willing buyer and a willing seller. For unquoted private company shares, that figure is rarely obvious - it requires a methodical analysis of the company, the share class and the specific rights attaching to the holding.
Optival prepares the independent valuation report executors and their solicitors need to satisfy HMRC, evidence the IHT400 figures and protect against future challenge.
When is a probate valuation required?
Common situations where executors and advisers commission an independent report.
IHT400 submission
The deceased held unquoted shares and an open-market value is required for the inheritance tax return.
Minority family holding
A non-controlling stake in a family or owner-managed business must be valued, typically with discounts for lack of control and marketability.
Business Property Relief review
Where BPR is claimed, the valuation supports the relief position and quantifies the shares' qualifying status.
Estate distribution
Beneficiaries need an evidenced figure to divide the estate fairly, particularly when one beneficiary takes the shares and others receive cash.
Our methodology
We apply the valuation method best suited to the company and the share class, cross-checking the result against alternative approaches to test sensitivity.
Earnings-based valuation
For trading companies with stable profits, we apply earnings multiples (EBITDA or P/E) calibrated to listed comparables and recent UK private transactions in the same sector.
Net asset value
For investment companies, property holding vehicles or asset-rich businesses, we anchor the valuation on adjusted net assets, restating to fair value where appropriate.
Discounted cash flow
Where the company has reliable forecasts and material growth or wind-down dynamics, a DCF cross-check is used to validate the multiples-based conclusion.
Discounts for the holding
We apply evidenced discounts for lack of control (minority interests) and lack of marketability (DLOM), sized using restricted-stock studies and the rights set out in the articles and shareholders' agreement.
Key UK considerations
- Open-market value as defined under section 160 IHTA 1984 - not 'realisable' or 'forced sale' value.
- Information available to the hypothetical buyer is restricted to that which would reasonably have been available at the date of death.
- Minority discounts must be evidenced - HMRC's Shares & Assets Valuation team frequently challenges unsupported percentages.
- Business Property Relief implications should be considered alongside the valuation, particularly for trading companies.
- Loss-on-sale relief may apply if the executors later sell the shares within twelve months at a lower price.
Optival provides independent valuation advice. We are not a regulated tax adviser and do not act for executors in dealings with HMRC.
Timeline & deliverables
From a typical kick-off call to the final report, executors can expect a delivered IHT-ready valuation within 5 working days of receiving complete company information.
- Independent valuation report (PDF) with full methodology
- Schedule of comparables and discount evidence
- Summary letter suitable for solicitors and HMRC enclosure
- Follow-up support for HMRC queries on a fixed-fee basis
Delivered as part of
HMRC & Tax Valuations
Probate share valuations sit within our HMRC & Tax Valuations tier - fixed fee from £2,200, independent and clearly documented for executors and their advisers. See the full pricing structure.
Administering an estate with unquoted shares?
Share a few details and a senior valuer will confirm scope, fee (from £2,200) and how the report supports IHT400 form filing.
- Response from a senior valuer within 4 business hours
- No obligation - scoping call and fixed-fee quote
- Independent, HMRC-aware methodology
Probate Valuation FAQ
Common questions from executors, solicitors and accountants.
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Read articleNeed a probate valuation?
Send us a brief description of the estate and the company. We'll confirm scope, fee and timeline within one working day.
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