If the deceased person owned a business or business assets or was a member of a business partnership then these assets will need to be included in the valuation of their estate.
Open market valuation
As with the valuation of land and buildings, the open market value is used to assess the value of business interests and partnerships.
The open market value is defined as the price that the business interest might reasonably fetch if it was sold on the open market to a willing buyer at the date of the transfer.
Unless the business interest is very small, we recommend that any interest in a business should be formally valued. The easiest solution is to ask the accountant to the business to prepare the valuation.
If the business interest is small then a valuation by the personal representatives should suffice. In any event, a formal valuation is not required where the gross value of the whole estate is going to be worth less than £250,000.
For larger business interests, HM Revenue & Customs will want business accounts to be prepared as at the date of death.
Supporting documentation including the last three years of accounts and formal documents (for example, a partnership agreement) should be submitted with the Inland Revenue Account to the probate registry.
Please note that information which we provide through Lasting Post is in outline for information or educational purposes only. The information is not a substitute for the professional judgment of a solicitor, accountant or other professional adviser. We cannot guarantee that information provided by Lasting Post will meet your individual needs, as this will very much depend on your individual circumstances. You should therefore use the information only as a starting point for your enquiries.