Probate Value on Shared Ownership Property

Chris75

A person lived in a sheltered accommodation housing association shared ownership flat. On death the flat, under the terms of the lease, must be vacated within 30 days and sold (with the tenant picking up the costs). The housing association are then entitled to their share of the gross proceeds (£30000) plus £1000 for each year the person lived in the flat.


This means that we have:


The sale value of the flat - lets say £100000
The %age owned by the housing association -30% or £30000
£1000 for each year of tenancy say £6000
The costs of selling agents & solicitors say £2000.


What is the property value for probate?

G6JNS

Chris75 wrote: »

A person lived in a sheltered accommodation housing association shared ownership flat. On death the flat, under the terms of the lease, must be vacated within 30 days and sold (with the tenant picking up the costs). The housing association are then entitled to their share of the gross proceeds (£30000) plus £1000 for each year the person lived in the flat.


This means that we have:


The sale value of the flat - lets say £100000
The %age owned by the housing association -30% or £30000
£1000 for each year of tenancy say £6000
The costs of selling agents & solicitors say £2000.


What is the property value for probate?

Is the estate close to the IHT threshold? If no really does not matter that much. If it does then the estate value is £64,000. Is the HA responsible for the sale of the property or the estate?

getmore4less

Have a read of the HMRC valuing property pages in the manual(all on-line) or give HMRC a call.

normally selling costs can't be deducted.

There are adjustments for joint ownership.


IS there any IHT involved, if not close and has to be sold then it won't matter as long as you get close enough to avoid any CGT issues.


Does the lease even allow an open market sale?

Chris75

The housing association has 3 months to find a buyer of their choice and then it is open market. If the housing association find a buyer within the 3 months there are no selling agent costs but otherwise they are the seller responsibility.


I has wondered whether the fact that the sale is required under the contract entered into by the deceased made any selling costs allowable - effectively a debt to be paid.

getmore4less

Whats the value of full estate and the available nil rate band(with any transferable amount)?

Chris75

We are OK with the nil Inheritance Tax band as it appears that the probate value excludes the Housing Association part.

The selling fees we can argue about if necessary - which it shouldn't be.


Thanks for the help.