With the Autumn 2024 budget announcing fundamental changes to Inheritance Tax relief, further uncertainty has been cast over what is already, for plenty of people, a complicated set of rules to understand. It’s fully reasonable to want to get the estate valuation and probate processes out of the way in the wake of a loss, but many people find this tricky when the goalposts for paying Inheritance Tax and applying for probate seem to keep moving.

These changes only add to the confusion surrounding when probate is needed and whether the value of an estate will affect the administration process. It is understandable to be keen to resolve estate matters quickly and correctly the first time around, which means you’ll need to take into consideration how the changes to the IHT relief budgets could affect the process.

Our probate and estate lawyers use their expert knowledge to help clients know whether they need to bring the estate they are managing to probate, and also share guidance on how to build tax-friendly portfolios in response to the changes. Our Wills and Inheritance Tax planning services will prioritise your wants and wishes whilst ensuring that you are in compliance with the new guidelines. 

If you’d like more specialist advice suited to your circumstances, you can speak to one of our solicitors and specialist lawyers in Ashford, Cranbrook and Hythe.

Please be aware that this blog is for informative purposes only and should not be taken as legal advice.

What does probate involve?

Probate is the process of dealing with the administration of a person’s estate following their death. It many cases, the process will involve settling outstanding debts and paying off any Inheritance Tax, utility bills, mortgages, or loans before you are allowed to start distributing assets. For bespoke advice on your probate needs, talk to one of our probate and estate administration solicitors and lawyers.

How much does an estate need to be worth to go to probate?

Whilst there is no set minimum value for an estate to avoid probate in the UK, each financial institution or bank will have its own threshold limit for the maximum amount you can access without needing to apply for probate. As a general rule, however, probate will not be typically required if the estate is valued at under £5,000 or if assets were held jointly, for example, in a joint bank account.

How to find out the value of a deceased person’s estate

Valuing an estate for probate just means figuring out how much the collective assets and savings of the deceased are worth. This is important because you’ll need to report the value to HM Revenue and Customs (HMRC) within six months of when the person dies, as you must start paying any necessary Inheritance Tax within that time frame.

There are steps to take to find out the value of an estate for probate, starting by contacting relevant organisations such as banks, pension providers, employers or utility providers to find out about any potential debts and assets the deceased person held.

Then, you have the option to estimate the value yourself or have a professional valuation done by an estate agent or a chartered surveyor. This value, once confirmed by HMRC, will tell you whether or not a Grant of probate is needed. The threshold for an estate value for probate can range between £5,000 and £50,000 depending on the policies of the financial organisation or bank.

Once you have the value of the estate, you can proceed with applying to the Probate Registry for confirmation of the estate’s value. This is the official valuation that will allow for the legal distribution of the estate in line with the contents of the Will, and determines whether Inheritance Tax returns are necessary.

The recent changes following the Autumn 2024 budget effect how much money an estate should be worth before probate will be required, impacting both the composition of the deceased estate (that is how it is organised and what sorts of assets they owned) as well as the policies of the institutes that hold those assets.

For estates that are found to be subject to Inheritance Tax, you will need to complete an Inheritance Tax return (IHT400) and submit it to the HMRC. Only then can you distribute the estate.

UK changes to Inheritance Tax relief following Autumn 2024 budget

The recent changes to the UK Inheritance Tax relief introduced significant changes to IHT regulations. This has the potential to further complicate the process, so it’s understandable to wonder how and if it will affect the necessity for probate with certain estates. The key changes that might affect if an estate needs to go to probate are:

• A Threshold Freeze— This refers to the IHT threshold, which is also sometimes called the nil-rate band. Any estate that falls within the Nil-rate band will not be liable for an Inheritance Tax. It remains unchanged at £325,000.
• The temporary removal of Agricultural Property Relief—Initially, this was announced as the abolition of the exemption of agricultural properties from inheritance tax (known as APR). In more recent updates, the new rules were defined to reflect the government’s goal to protect small family farms whilst making the IHT system fairer, inspiring a reformation effort to APR starting April 6, 2026.
• Changes to the Pensions exception— Before the changes, the value of pension death benefits were not taken into account when the estate was valued. After the change, this will be included in the gross value of an estate for probate, equally effecting DB and DC schemes, as well as non-UK schemes, with very limited exceptions for charity lump sum death benefits.

But what does any of that mean, and does it affect who needs probate? Well, there are two main impacts on the probate requirements to consider:

• Due to the threshold freeze and simultaneous changes to various IHR reliefs, some estates will have higher final values, pushing them out of the NIL rate band and into being an estate in probate.
• With an increase in attention to the IHT threshold, the accurate valuation of the asset becomes increasingly important. If your estate value exceeds or is merely close to the IHT threshold, then Probate may be needed to ensure that there is full compliance with tax laws.

We have covered the changes announced in the 2024 Autumn budget and their impact in Inheritance Tax in this recent blog.

Speak to our Wills and probate solicitors and specialist lawyers today 

It is understandable to want probate advice from professionals with the rules shifting and announcements being made in dense legal jargon. Our team of probate and estate administration solicitors and lawyers have been overseeing cases and helping to sort out Inheritance Tax implications for decades, and as 99% of our customers say that they’d work with us again, we are quite confident in our proactive and sensitive approach.  

If you’d like more specialist advice suited to your circumstances, you can speak to one of our solicitors or specialist lawyers in Ashford, Cranbrook and Hythe.