How to value business and partnership interests

The value of the deceased’s business interests should be added to the value of the estate.

As with all assets, if the gross estate is thought to be worth less than £250,000, formal valuations are not required. Estimations can be made on the basis of information available.

For more valuable estates, particularly taxable estates, there is a greater onus on the personal representatives to obtain formal, accurate valuations. See our guide “Can I use rough valuations for probate?”.

Valuing the deceased’s business interests may not be easy, and professional advice may be required.

Shares in private companies

To value unquoted shares in a private company, see our guide “How to value unlisted (private) shares for probate”.

Sole traders and partnerships

If the deceased was a sole trader or a partner, we recommend contacting the accountant for that business. Ask for a formal valuation of the business, or, if a partnership, the deceased’s share of the business.

Alternatively, if it is a simple, low value business, it may be possible simply to combine the value of the capital and current accounts. However, the true valuation of the business for probate and inheritance tax is the “open market value” at date of death. This is not the same as book values of assets.

Taxable estates

If the estate is taxable, the full “Inheritance tax account” form (IHT400) must be completed. Supporting documents, such as a partnership agreement and the last two years’ accounts, should be submitted to HM Revenue & Customs along with the IHT400.

If the estate is taxable, or if the deceased’s business interests are complex and comprised a significant proportion of his or her estate, we recommend seeking advice from a probate solicitor or other probate professional.