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  • FIRST POST
    • charlie2015
    • By charlie2015 14th Oct 16, 6:34 PM
    • 25Posts
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    charlie2015
    C,g tax
    • #1
    • 14th Oct 16, 6:34 PM
    C,g tax 14th Oct 16 at 6:34 PM
    Hi I wonder if anyone can offer any advice when my fathers estate was valued . the executors valued all his assets at £554,000 at probate but sold house for £625,000 . a difference of approx. £70,000 .this you would assume would attract C.G.TAX they are saying their may be no tax at all to pay .they are also saying their accountant , solicitor, and they themselves have over a period of over 2years 7 months despite repeatedly trying . have had no figures or reply from H.M.R.C. they have they say acknowledged their call. does this seem normal to myself it seems a long time to hear no figures or nothing at all. this is an on going problem and has been mentioned before . does anybody have any advice on the above with many thanks.
Page 1
    • Yorkshireman99
    • By Yorkshireman99 14th Oct 16, 7:15 PM
    • 1,586 Posts
    • 1,347 Thanks
    Yorkshireman99
    • #2
    • 14th Oct 16, 7:15 PM
    • #2
    • 14th Oct 16, 7:15 PM
    Hi I wonder if anyone can offer any advice when my fathers estate was valued . the executors valued all his assets at £554,000 at probate but sold house for £625,000 . a difference of approx. £70,000 .this you would assume would attract C.G.TAX they are saying their may be no tax at all to pay .they are also saying their accountant , solicitor, and they themselves have over a period of over 2years 7 months despite repeatedly trying . have had no figures or reply from H.M.R.C. they have they say acknowledged their call. does this seem normal to myself it seems a long time to hear no figures or nothing at all. this is an on going problem and has been mentioned before . does anybody have any advice on the above with many thanks.
    Originally posted by charlie2015
    Something is seriously wrong here. The executors should have obtained a professional valuation at the date of death. for the purposes of obtaining probate. IHT at 40% starts on an estate value of £325,000. However if the deceased had a spouse their IHT allowance may have been transferred so no IHT may have been payable. CGT would be payable on the gain between the probate value and the selling price. In any case the executors should have dealt with the estate within a year and distributed the estate proceeds. It sounds implausible that the executors have not been able to resolve matter with HMR&C. The executors need their backsides kicking and are liable for any losses as a result of their lack of action.
    • charlie2015
    • By charlie2015 15th Oct 16, 6:03 AM
    • 25 Posts
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    charlie2015
    • #3
    • 15th Oct 16, 6:03 AM
    • #3
    • 15th Oct 16, 6:03 AM
    hi the executors only took estate agents valuations .swore oath at £554,000 but had previous to this sold house for £625,000 they say they informed HMRC ? last week I wrote to them asking a number of questions . they are not happy being held to account. asking how much CGT there is to pay and if there are any penaltys to pay they say they don't know about penaltys and have not heard from HMRC how are they liable? thanks
    • Yorkshireman99
    • By Yorkshireman99 15th Oct 16, 6:35 AM
    • 1,586 Posts
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    Yorkshireman99
    • #4
    • 15th Oct 16, 6:35 AM
    • #4
    • 15th Oct 16, 6:35 AM
    hi the executors only took estate agents valuations .swore oath at £554,000 but had previous to this sold house for £625,000 they say they informed HMRC ? last week I wrote to them asking a number of questions . they are not happy being held to account. asking how much CGT there is to pay and if there are any penaltys to pay they say they don't know about penaltys and have not heard from HMRC how are they liable? thanks
    Originally posted by charlie2015
    How could the executors sell the house before probate? They had no legal authority to do so. If the value for probate was deliberately low then they broke the law. Why have they not distributed the estate? They sound completely incompetent. More detail needed to suggest what you should do. CGT is 28% of the gain minus the annual allowance. This would come out of the estate but if the executors deliberately under declared the value then they would have to pay it themselves. They might also be charged penalties.
    Last edited by Yorkshireman99; 15-10-2016 at 7:22 AM.
    • charlie2015
    • By charlie2015 15th Oct 16, 11:44 AM
    • 25 Posts
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    charlie2015
    • #5
    • 15th Oct 16, 11:44 AM
    • #5
    • 15th Oct 16, 11:44 AM
    hi the executors wrote to me on the 2.5.2014 to inform me that the house had been sold for £625,000 only to swear under oath that the total assets were £554,369 on the 29.5.14 at probate . this makes no sense to me .why would you put in the wrong figure unless they rushed probate .I asked them if they updated HMRC they say they did? . most of the estate has been paid out there is about £45 ,000 left .this has now been going on for 2 years 9months .and they are saying they have never had a reply or tax valuation from HMRC many thanks for your help
    • theoretica
    • By theoretica 15th Oct 16, 11:56 AM
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    theoretica
    • #6
    • 15th Oct 16, 11:56 AM
    • #6
    • 15th Oct 16, 11:56 AM
    Would a mortgage on the house reduce the total asset value below the sale price? Is it Net or Gross assets?
    But a banker, engaged at enormous expense,
    Had the whole of their cash in his care.
    Lewis Carroll
    • Crabapple
    • By Crabapple 15th Oct 16, 11:57 AM
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    Crabapple
    • #7
    • 15th Oct 16, 11:57 AM
    • #7
    • 15th Oct 16, 11:57 AM
    From what you say they agreed a sale on the property before probate was granted so presumably the sale went through shortly after.

    The normal procedure in that case would be to submit the agreed sale value for IHT and probate. Property values have to be agreed with the district valuer and I find it hard to believe they would not automatically said the sale price should be substituted for IHT.

    The revenue are frequently slow and just maybe if the executors were still negotiating with them it might be possible that it's not resolved but 2.5 years later saying the revenue haven't even spoken to them seems very suspect.

    If a property is appropriated to beneficiaries then a CGT gain might be removed but you'd need a few beneficiaries to soak up a £70k gain.

    The executors or their reps should be chasing the revenue and getting this resolved because it should have been sorted a long time ago. Unfortunately your only option aside from chasing would be to apply to get them removed which is not a simple or quick process.
    Daughter born January 2012 Son born February 2014

    Slimming World ~ trying to get back on the wagon...
    • Yorkshireman99
    • By Yorkshireman99 15th Oct 16, 12:27 PM
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    Yorkshireman99
    • #8
    • 15th Oct 16, 12:27 PM
    • #8
    • 15th Oct 16, 12:27 PM
    Would a mortgage on the house reduce the total asset value below the sale price? Is it Net or Gross assets?
    Originally posted by theoretica
    The value should be the gross value at the date of death. Any mortgage owing reduces the overall estate value. The crucial point is that by undervaluing the house for probate this becomes the base value for any future CGT calculatio so more CGT is payable then need be. In any case deliberately declaring the value could result in an underpayment of IHT and incur penalties.
    • Yorkshireman99
    • By Yorkshireman99 15th Oct 16, 12:35 PM
    • 1,586 Posts
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    Yorkshireman99
    • #9
    • 15th Oct 16, 12:35 PM
    • #9
    • 15th Oct 16, 12:35 PM
    hi the executors wrote to me on the 2.5.2014 to inform me that the house had been sold for £625,000 only to swear under oath that the total assets were £554,369 on the 29.5.14 at probate . this makes no sense to me .why would you put in the wrong figure unless they rushed probate .I asked them if they updated HMRC they say they did? . most of the estate has been paid out there is about £45 ,000 left .this has now been going on for 2 years 9months .and they are saying they have never had a reply or tax valuation from HMRC many thanks for your help
    Originally posted by charlie2015
    Was any IHT paid? If the executors made a capital gain as it seems happened then the state is liable for that and the executors should have made a tax return declaration to HMR&C and subsequently paid the CGT due. If, as you say, they undervalued the house for probate then they have caused a CGT liability by their own stupidity or negligence. In any case taking more than two years to administer an estate is outrageous. You need to find ours details of exactly what they have and have not done. If, as it seems, they had mismanaged the administration they can be personally liable for any losses suffered by the estate. It may be possible to convince HMR&C that the probate value should be adjusted and avoid any CGT liability but it is possible the executors may be personally liable for any penalty. I suggest they get urgent paid for, by them, professional advice sort out the mess they have caused.
    Last edited by Yorkshireman99; 15-10-2016 at 12:38 PM.
    • charlie2015
    • By charlie2015 15th Oct 16, 12:46 PM
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    charlie2015
    hi it is not IHT there was the joint threshold of£650,000 which applied . it is CGT the difference between the values given above. what gets to me if only this had been done properly we would not be in this mess .the beneficeries have been kept in the dark all the way through this .well 3 out of 5 have .they are very reluctant to discuss what they are up to it has taken me nearly 3 years to find out what the offers for the house were. with many thanks
    • Yorkshireman99
    • By Yorkshireman99 15th Oct 16, 4:02 PM
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    Yorkshireman99
    hi it is not IHT there was the joint threshold of£650,000 which applied . it is CGT the difference between the values given above. what gets to me if only this had been done properly we would not be in this mess .the beneficeries have been kept in the dark all the way through this .well 3 out of 5 have .they are very reluctant to discuss what they are up to it has taken me nearly 3 years to find out what the offers for the house were. with many thanks
    Originally posted by charlie2015
    Thanks for that. The executors have nobody but themselves to blame. You have every reason to be upset at their incompetence. I suggest you write a formal letter to them copied to the other beneficiaries stating that unless they provide the full fact including copies of the correspondence they have had with HMR&C within fourteen days you will consult a solicitor with a view to having them removed as executors and claiming damages form them.
    • getmore4less
    • By getmore4less 15th Oct 16, 4:50 PM
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    getmore4less
    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
    • By MichelleUK 15th Oct 16, 5:19 PM
    • 131 Posts
    • 96 Thanks
    MichelleUK
    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
    • By Yorkshireman99 15th Oct 16, 5:30 PM
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    Yorkshireman99
    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.
    Originally posted by MichelleUK
    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
    • By MichelleUK 15th Oct 16, 6:12 PM
    • 131 Posts
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    MichelleUK
    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!
    Originally posted by Yorkshireman99
    (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!
    Last edited by MichelleUK; 15-10-2016 at 6:20 PM.
    • Yorkshireman99
    • By Yorkshireman99 15th Oct 16, 6:21 PM
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    Yorkshireman99
    (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!
    Originally posted by MichelleUK
    It is the executors that need to look at the link!
    • getmore4less
    • By getmore4less 15th Oct 16, 8:46 PM
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    getmore4less
    The op has no idea what the assets were valued at.
    • Yorkshireman99
    • By Yorkshireman99 15th Oct 16, 10:04 PM
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    Yorkshireman99
    The op has no idea what the assets were valued at.
    Originally posted by getmore4less
    The OP has stated what the value of the house was in the probate application.
    • getmore4less
    • By getmore4less 16th Oct 16, 10:10 AM
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    getmore4less
    The OP has stated what the value of the house was in the probate application.
    Originally posted by Yorkshireman99
    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
    • By charlie2015 16th Oct 16, 11:00 AM
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    charlie2015
    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.
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