C,g tax

Options
2

Comments

  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Name Dropper First Anniversary First Post I've helped Parliament
    Options
    Ask for a copy of the estate accounts and the capital return sent to HMRC.

    see what value was used for the house.

    Just because the capital return was less than the house sold price is not evidence they undervalued the house on the capital return.
    you need to see details of all the assets and debt together.

    There is insufficient information provided to establish anything other than speculative guessing.
  • MichelleUK
    MichelleUK Posts: 427 Forumite
    First Post First Anniversary
    Options
    From the details that have been supplied already, the following appears to be true:

    1. As the estate did not have to pay IHT, the value of the house for probate has never been 'ascertained' by HMRC, so the figure quoted for the house of £554k does not have to be used in the calculation of CGT.
    2. The CGT should be calculated using the REAL market value as at the date of death.
    3. To be 100% sure that HMRC will accept your market value amount, complete a CG34 Post Transaction Valuation form and then it will not be open to doubt.

    If there was not a long time between death and sale, there may not be any CGT to pay.

    The way that it has been described by the OP, it is quite possible that the solicitor and accountant have already done this but have dropped the ball on chasing HMRC for the CG34 valuation.
  • Yorkshireman99
    Yorkshireman99 Posts: 5,470 Forumite
    Options
    MichelleUK wrote: »
    From the details that have been supplied already, the following appears to be true:

    1. As the estate did not have to pay IHT, the value of the house for probate has never been 'ascertained' by HMRC, so the figure quoted for the house of £554k does not have to be used in the calculation of CGT.
    2. The CGT should be calculated using the REAL market value as at the date of death.
    3. To be 100% sure that HMRC will accept your market value amount, complete a CG34 Post Transaction Valuation form and then it will not be open to doubt.

    If there was not a long time between death and sale, there may not be any CGT to pay.

    The way that it has been described by the OP, it is quite possible that the solicitor and accountant have already done this but have dropped the ball on chasing HMRC for the CG34 valuation.
    If the executors declared the value for probate as £554K that IS the base figure on which CGT is calculated. The executors can apply to adjust this if they provide sufficient evidence. The basic problem from what the OP has said is that they are quite clueless!
  • MichelleUK
    MichelleUK Posts: 427 Forumite
    First Post First Anniversary
    edited 15 October 2016 at 6:20PM
    Options
    Yorkshireman99 wrote: »
    If the executors declared the value for probate as £554K that IS the base figure on which CGT is calculated. The executors can apply to adjust this if they provide sufficient evidence. The basic problem from what the OP has said is that they are quite clueless!

    (Deep sigh)....I really cannot be bothered to look up the HMRC links for you, as it is the weekend and I spend enough time on a weekday immersed in the HMRC site. A quick google found this, if it is of any interest:

    https://www.taxation.co.uk/Articles/2013/10/30/315851/acquisition-value

    Edit... that link does not allow non subscribers to read the replies but if you Google "Taxation acquisition value" you should be able to read the responses!
  • Yorkshireman99
    Yorkshireman99 Posts: 5,470 Forumite
    Options
    MichelleUK wrote: »
    (Deep sigh)....I really cannot be bothered to look up the HMRC links for you, as it is the weekend and I spend enough time on a weekday immersed in the HMRC site. A quick google found this, if it is of any interest:

    https://www.taxation.co.uk/Articles/2013/10/30/315851/acquisition-value

    Edit... that link does not allow non subscribers to read the replies but if you Google "Taxation acquisition value" you should be able to read the responses!
    It is the executors that need to look at the link!
  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Name Dropper First Anniversary First Post I've helped Parliament
    Options
    The op has no idea what the assets were valued at.
  • Yorkshireman99
    Yorkshireman99 Posts: 5,470 Forumite
    Options
    getmore4less wrote: »
    The op has no idea what the assets were valued at.
    The OP has stated what the value of the house was in the probate application.
  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Name Dropper First Anniversary First Post I've helped Parliament
    Options
    Yorkshireman99 wrote: »
    The OP has stated what the value of the house was in the probate application.

    I believe that they has said the value of the estate was the £554k NOT the value of the house.

    only to swear under oath that the total assets were £554,369 on the 29.5.14 at probate

    That will be the total less any debts, ,without seeing the accounts/IHT forms they have no idea what value the house was declared at.
  • charlie2015
    charlie2015 Posts: 52 Forumite
    First Post First Anniversary Combo Breaker
    Options
    hi their was very low amounts in the estate .probably most went on my fathers funeral. could someone please explain what happens at probate do you put in the sum on the forms . and at a later date swear the oath if this is the case why did they not change the figures to the correct amount at the time. with many thanks for advice.
  • Yorkshireman99
    Yorkshireman99 Posts: 5,470 Forumite
    Options
    charlie2015 wrote: »
    hi their was very low amounts in the estate .probably most went on my fathers funeral. could someone please explain what happens at probate do you put in the sum on the forms . and at a later date swear the oath if this is the case why did they not change the figures to the correct amount at the time. with many thanks for advice.
    The executors are obliged to put as accurate figure as possible for all assets on the probate application. With a property of that value I would expect them to have paid for a professional valuation by a RICS qualified valuer. Estate agents valuations are meaningless for this purpose. HMR&C usually get the District Valuer to check the amount and if need be they will negotiate and agree a value with the executor's valuer.Of course this will cost a few hundred pounds. However this establishes a firm base for any future CGT valuation. This may end up costing them far more than need have been paid. If the estate is liable for extra taxation and, or, penalties then they are personally liable to the beneficiaries. To be brutally frank they deserve to be penalized for for not dealing with their responsibilities properly. They could have taken advice that is readily available but chose not to. They have the opportunity now to try and put things right ASAP and I suggest you urge them to do so. It might be cheaper for them if they get the mess sorted out professionally.
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343.2K Banking & Borrowing
  • 250.1K Reduce Debt & Boost Income
  • 449.7K Spending & Discounts
  • 235.3K Work, Benefits & Business
  • 608.1K Mortgages, Homes & Bills
  • 173.1K Life & Family
  • 247.9K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards