Inheritance Tax - Gifts

getmore4less

weimo wrote: »

The property has been overvalued in my opinion by 10k. But the estate agent advises this is how much similar properties are going for under probate circumstances, even with the work required.

I read horror stories about penalties issued by HMRC for under valuing.

I plan to rent the property out, but will require considerable refurb before that stage. So kind of a double whammy for me.

In terms of reducing value of other assets, the remainder is stocks and cash so their value is absolute.

Get the agent to show you the list of sold properties they are using for this valuation.

You could pay a professional valuer to do a market valuation

Have you got a proper market valuation from them which details the reason behind their valuation or just a standard estate agent one..

It is the valuer that can get into trouble if they have not done the job properly, if you think it is £10k less on what basis if you can justify that and back it up should the HMRC valuer what a look.

it is not something stupid like £260k or some other local market barrier.

Is the gross yield sensible that tends to set the bottom value where BTL investors will show an interest.

alun4

You can also check using sites like Zoopla.co.uk Put the postcode and search for SOLD PRICES.

weimo

I have done that, but doesn't give any appreciation for condition. There was a new build in the street which is detached. So if they were to take this as an example would make it look as though I was pulling a fast one. The trouble is I'm looking at it with the amount of work that is required. Some people do not really appreciate this so would pay over the odds......which is the estate agents point I think.

I would like to put the value I want in but pointless if its thrown back as could end up costing me even more.

weimo

getmore4less wrote: »

it is not something stupid like £260k or some other local market barrier.

Is the gross yield sensible that tends to set the bottom value where BTL investors will show an interest.

Sorry what does this mean?

Basically a house of that type would sell for 175 in good order....i.e. you could move in and do nothing.

I estimate 25k - 35k to refurb

So I value @ 140k - Estate agent says lowest 150k as you wouldnt want to do all that work for nil profit

noh

Whatever value you put down it is likely the District Valuation office will become involved.

http://www.hmrc.gov.uk/manuals/ihtmanual/IHTM23002.htm

getmore4less

weimo wrote: »

Sorry what does this mean?

Basically a house of that type would sell for 175 in good order....i.e. you could move in and do nothing.

I estimate 25k - 35k to refurb

So I value @ 140k - Estate agent says lowest 150k as you wouldnt want to do all that work for nil profit

For a market valuation you do take into account all the negatives including refurb work.

How many opinions have you got on this

What has the agent written down, we got a 2 page report for market value including loads of info justifying their valuation that could be put in with the IHT forms.

if the going rate is £175k(with sales to back that up) and there is at least £25k of refurb(get some builders estimates) it won't sell for £150k.

Look for examples of distressed sales look at sold and auction.

What will it rent for, 5% gross yield on £175k it would need to be more than £730pm.

weimo

This was all verbal over the phone I explained the situation. I called three agents who all said the same thing. One agent also said HMRC phoned up from time to time for price confirmation, which now seems like BS if they have their own specialist department.

Average rent would be 700 - 800 pcm it is not an expensive area.

I did think about the report but as I'm not selling there was a charge for this. I know property pretty well and how much things cost and works involved so gave an accurate description.

getmore4less

I think I would look for a proper market valuation that is backed up with a report not an EA valuation over the phone to put on the IHT forms.

MIght cost a bit I googles for an example try this link
http://www.maggsandallen.co.uk/bin/download_blob.php?id=czo2NDoi6WQyYGAqtGaMWUeLOnutUjpTeQSlAsHjXm7TeQSlAsHOoX9OVFFchpK5S1yTeQPlUsSYKUSahE68gBTeQPlUsSIGNgj1FxRtgTmuitklwGMPQ3npfiI7


also found this
http://www.stepjournal.org/journal_archive/2012/step_journal_july_2012/probate_valuation.aspx

noh

You might wan't to read this too.

http://www.hmrc.gov.uk/inheritancetax/how-to-value-estate/land.htm#2

weimo

I may put my figure down of 140k there is a box which allows provisional values.

Also in the property form there is an alowance to describe factors which affect the poperty value.

If the value is queried I will then get a chartered surveyor to come and value the property.