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    • charb56
    • By charb56 13th Sep 17, 1:47 PM
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    charb56
    probate property valuation less than current estate agent valuation
    • #1
    • 13th Sep 17, 1:47 PM
    probate property valuation less than current estate agent valuation 13th Sep 17 at 1:47 PM
    can anyone advise, my late brothers property was given a formal RICS valuation from a reliable company of £450,000 9 months ago. we have now received probate grant and have started getting valuations from estate agents to look at selling the property in the near future which are coming in around £30-50,000 higher- we don't know if the actual selling price would end up lower and it is in an area of greater London where prices have risen. would this be subject to an HMRC enquiry if the selling price was a lot more , and is there any kind of time factor in this, say, if we kept the property for a year or two and then it sold at a higher price?
Page 1
    • Yorkshireman99
    • By Yorkshireman99 13th Sep 17, 2:27 PM
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    Yorkshireman99
    • #2
    • 13th Sep 17, 2:27 PM
    • #2
    • 13th Sep 17, 2:27 PM
    can anyone advise, my late brothers property was given a formal RICS valuation from a reliable company of £450,000 9 months ago. we have now received probate grant and have started getting valuations from estate agents to look at selling the property in the near future which are coming in around £30-50,000 higher- we don't know if the actual selling price would end up lower and it is in an area of greater London where prices have risen. would this be subject to an HMRC enquiry if the selling price was a lot more , and is there any kind of time factor in this, say, if we kept the property for a year or two and then it sold at a higher price?
    Originally posted by charb56
    If you have probate then HMR&C have accepted the valuation at the date of death. Any gain above that may be subject to CGT less any allowances. You might want to discuss it with the valuer.
    • Crabapple
    • By Crabapple 13th Sep 17, 2:39 PM
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    Crabapple
    • #3
    • 13th Sep 17, 2:39 PM
    • #3
    • 13th Sep 17, 2:39 PM
    It depends whether HMRC have agreed the valuation or not. They may investigate property values but if they query it then you should refer back to the surveyor to explain.

    If there is a post death increase in value then you need to look at whether there is a CGT liability.

    Having the grant of probate does not mean HMRC have looked at or agreed the value.
    Daughter born January 2012 Son born February 2014

    Slimming World ~ trying to get back on the wagon...
    • Yorkshireman99
    • By Yorkshireman99 13th Sep 17, 4:12 PM
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    Yorkshireman99
    • #4
    • 13th Sep 17, 4:12 PM
    • #4
    • 13th Sep 17, 4:12 PM
    It depends whether HMRC have agreed the valuation or not. They may investigate property values but if they query it then you should refer back to the surveyor to explain.

    If there is a post death increase in value then you need to look at whether there is a CGT liability.

    Having the grant of probate does not mean HMRC have looked at or agreed the value.
    Originally posted by Crabapple
    Surely the clearing of probate by HMR&C means they HAVE accepted the value? At that that sort of value they would almost certainly involved the District Valuer. I don't see how they can have it both ways.
    • Crabapple
    • By Crabapple 13th Sep 17, 4:21 PM
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    Crabapple
    • #5
    • 13th Sep 17, 4:21 PM
    • #5
    • 13th Sep 17, 4:21 PM
    Like I said yesterday on another thread, sending back the receipt that you need to send to the probate registry to issue the grant does not mean HMRC have processed your IHT return. Nothing is approved at that stage.
    Daughter born January 2012 Son born February 2014

    Slimming World ~ trying to get back on the wagon...
    • getmore4less
    • By getmore4less 13th Sep 17, 5:39 PM
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    getmore4less
    • #6
    • 13th Sep 17, 5:39 PM
    • #6
    • 13th Sep 17, 5:39 PM
    If there has been no IHT they may never ascertain the value till something else triggers like the CGT return.

    450k would have been an educated guess 30k difference 9 month later is a tiny difference.
    • Yorkshireman99
    • By Yorkshireman99 13th Sep 17, 6:06 PM
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    Yorkshireman99
    • #7
    • 13th Sep 17, 6:06 PM
    • #7
    • 13th Sep 17, 6:06 PM
    Like I said yesterday on another thread, sending back the receipt that you need to send to the probate registry to issue the grant does not mean HMRC have processed your IHT return. Nothing is approved at that stage.
    Originally posted by Crabapple
    How can that be so. Surely HMR&C must be satisfied with the figures otherwise they would not approve them? Just curious how this can be.
    • Crabapple
    • By Crabapple 13th Sep 17, 6:14 PM
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    • #8
    • 13th Sep 17, 6:14 PM
    • #8
    • 13th Sep 17, 6:14 PM
    The receipt is not approval. It just confirms they have the account and whatever tax you have paid.

    This allows the executors to apply for the grant.

    Approval of the figures comes (much) later when HMRC have been through the account.
    Daughter born January 2012 Son born February 2014

    Slimming World ~ trying to get back on the wagon...
    • Yorkshireman99
    • By Yorkshireman99 13th Sep 17, 6:18 PM
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    Yorkshireman99
    • #9
    • 13th Sep 17, 6:18 PM
    • #9
    • 13th Sep 17, 6:18 PM
    That sounds highly unlikely.
    • Crabapple
    • By Crabapple 13th Sep 17, 6:45 PM
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    Crabapple
    Well, it's been the procedure for many years, however unlikely you may think it to be.
    Daughter born January 2012 Son born February 2014

    Slimming World ~ trying to get back on the wagon...
    • Yorkshireman99
    • By Yorkshireman99 13th Sep 17, 6:58 PM
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    Yorkshireman99
    So you are saying that HMR&C pass the return and payment without checking it first?
    • Tom99
    • By Tom99 13th Sep 17, 7:11 PM
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    Tom99
    The Inheritance Tax office will allow probate to be granted before confirming whether they are happy with the property valuation.

    If inheritance tax is due they will refer the value to the Valuation Office which may take some months.

    You need to ask the Inheritance Tax office for confirmation that they are happy with all the figures provided and that all due Inheritance Tax has been paid.

    If the estate then sells the property for a higher value CGT will be due on the difference in value but there are allowances to set off against CGT.

    If CGT is payable and there is more than one beneficiary then consider transferring the beneficial interest in the property to the beneficiaries before it is sold. That way each beneficiary will get a £11,300 allowance.
    • Crabapple
    • By Crabapple 13th Sep 17, 7:29 PM
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    Crabapple
    So you are saying that HMR&C pass the return and payment without checking it first?
    Originally posted by Yorkshireman99
    No, I'm saying they don't 'pass' the return or check it until much later. They just confirm they have it which allows probate to be granted.
    Daughter born January 2012 Son born February 2014

    Slimming World ~ trying to get back on the wagon...
    • EasySolution
    • By EasySolution 14th Sep 17, 5:36 PM
    • 30 Posts
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    EasySolution
    when a solicitor or other professional is administering a Probate they ask HMRC for a Clearance Certificate before they distribute the estate.
    • Tom99
    • By Tom99 16th Oct 17, 10:51 PM
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    Tom99
    Probate can be granted quickly but the IT Office will reserve the right to query the values returned and this may take some months.

    I finally have a letter from the IT Office saying they will not be making any further queries. I would have prefered a straight forward reply that all tax due had been paid but I expect the letter I have is the best I am going to get.
    • eddyinfreehold
    • By eddyinfreehold 17th Oct 17, 9:09 AM
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    eddyinfreehold
    Tom99....

    ...thanks for your post above, you are a few weeks (or months) ahead of me in this journey. Could you answer a couple of questions for me?
    1. You have the 'no further queries' letter from HMRC Nottingham. Are you or your agents going to submit an IHT30 now to HMRC to obtain a clearance certificate or are you just going to assume the job is complete?
    2. From receiving the initial letter and tax calculation from Nottingham allowing you to obtain a Grant of Probate and the final 'no further queries letter' , what period of time was involved? We obtained Probate in late December 2016 and haven't heard a peep since. I'd be really interested to know how long they took with your business and whether any correspondence took place in the meantime.


    YM99:

    My understanding is the same as Crabapple. The initial letter I received said they would look in more depth at the account but in the meantime they made some minor corrections to the calculation and receipted the amount of IHT that had to be paid initially. Some of the wording on that 2 page letter is interesting, I quote....

    "Provisional Calculation

    We have not yet looked at your form IHT400 in detail. This is because we want the Grant for this estate to be issued quickly. We've calculated the amount of tax (and any interest) we think is due - we call this a Provisional Calculation."

    "What happens now

    When we look at your form IHT400 in more detail we may ask you for some more information, for example, a District Valuer may get in touch with you to discuss the value of any houses or land in the estate. This means that the amount of tax and interest shown in provisional calculation may not be the final amount.
    We cannot tell you how long it will take to establish the final amount of tax due as each estate we look at is different. It may take a few weeks if the estate is simple or several months if the estate is more complicated."

    ...sorry if it's a bit of a long post but that is the exact wording I got from HMRC showing that it is not the initial valuation signed off and approved at the Probate stage, that comes much later after their valuation and checks.

    I hope this helps.
    • Tom99
    • By Tom99 17th Oct 17, 9:26 AM
    • 552 Posts
    • 324 Thanks
    Tom99
    Tom99....

    ...thanks for your post above, you are a few weeks (or months) ahead of me in this journey. Could you answer a couple of questions for me?
    1. You have the 'no further queries' letter from HMRC Nottingham. Are you or your agents going to submit an IHT30 now to HMRC to obtain a clearance certificate or are you just going to assume the job is complete?
    2. From receiving the initial letter and tax calculation from Nottingham allowing you to obtain a Grant of Probate and the final 'no further queries letter' , what period of time was involved? We obtained Probate in late December 2016 and haven't heard a peep since. I'd be really interested to know how long they took with your business and whether any correspondence took place in the meantime.


    YM99:

    My understanding is the same as Crabapple. The initial letter I received said they would look in more depth at the account but in the meantime they made some minor corrections to the calculation and receipted the amount of IHT that had to be paid initially. Some of the wording on that 2 page letter is interesting, I quote....

    "Provisional Calculation

    We have not yet looked at your form IHT400 in detail. This is because we want the Grant for this estate to be issued quickly. We've calculated the amount of tax (and any interest) we think is due - we call this a Provisional Calculation."

    "What happens now

    When we look at your form IHT400 in more detail we may ask you for some more information, for example, a District Valuer may get in touch with you to discuss the value of any houses or land in the estate. This means that the amount of tax and interest shown in provisional calculation may not be the final amount.
    We cannot tell you how long it will take to establish the final amount of tax due as each estate we look at is different. It may take a few weeks if the estate is simple or several months if the estate is more complicated."

    ...sorry if it's a bit of a long post but that is the exact wording I got from HMRC showing that it is not the initial valuation signed off and approved at the Probate stage, that comes much later after their valuation and checks.

    I hope this helps.
    Originally posted by eddyinfreehold
    No I am not going to use ITH30 and am going to take it that the 'no further queries' letter is the last I will hear from them. All the calculated IT has been paid and their latest statement says £0 balance outstanding.

    Probate granted Feb, house sold Aug and 'no further queries' letter Oct after chasing them on the phone.

    I have now written to the CGT office to report the sale to them but have not heard back.

    Before probate was granted I had exactly the same letter as you saying further queries may be made.

    In July, once I knew the house sale had been agreed, I rang the Valuation Office and they confirmed they had been asked to look at the value and that they had reported back to the IT that they were happy with the probate value I had used.
    • Yorkshireman99
    • By Yorkshireman99 17th Oct 17, 9:29 AM
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    Yorkshireman99
    It just confirms that HMR&C are a law unto themselves. Cowboys comes to mind!
    • eddyinfreehold
    • By eddyinfreehold 17th Oct 17, 9:42 AM
    • 95 Posts
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    eddyinfreehold
    Tom99

    Thank you sir. It looks like we might be close to something happening then. I must be patient.

    YM99

    More lost sheep than cowboys I feel. Everything I've heard is that they are understaffed and all the experienced personnel have gone. It reminds me of the Passport Office fiasco a few years ago, when whole buildings were stuffed with pending applications.
    • Tom99
    • By Tom99 18th Oct 17, 1:26 AM
    • 552 Posts
    • 324 Thanks
    Tom99
    Once you have probate you can sell the property before you have IT 'clearance' so you need to think about CGT before selling using £450k as the purchase price.

    It there is more than one beneficiary and you will not need funds from the sale of the house to pay IT then I would Assent the property to the beneficiaries before exchange of contracts. That way each beneficiary will get the £11,300 annual allowance rather than just one allowance for the estate.

    You do not need to transfer the legal title to them, only Assent the beneficial interest and it does not need to be registered at the LR, so no delay, but must be signed before exchange of contract. A decent solicitor should be able to do this for about £300.

    You can leave it until you know the sale price, them work out the likely CGT bill to see if it is worth it and, if it is, prepare the Assent at the same time contracts are being prepared.

    Don't forget to allow all the set off's to CGT when you work out a figure, EA and legal on sale, EPS and costs of obtaining probate (at actual cost or at HMRC scale cost)
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