signing off final accounts

charlie2015

my father was a widower so there was a £650.000 IHT threshold . the estate is under this figure. I had the estate valued by an estate agent myself at £625 .000 . and told them so but they would not listen . they sold the house privately the whole thing is very shady. I do not know what rate band they used .will they have to sign of final accounts eventually. does anybody know about inventory accounts question please with many thanks to all

konark

Yes, final accounts will need to be prepared for the estate.

So by under-valueing the house at probate they have saved no IHT but landed the estate with a £13,000 CGT bill. The word maladministration springs to mind.

charlie2015

thanks konark for your reply. how did you come to £13.000? . I thought the tax rate to be 28% would it be 18%? which would be about £21.000 plus any penalties would the estate pay any penalties or the execs with many thanks to all

konark

Yes you are correct 28% is the CGT rate for executors so the calculation will be ;

Sale price £625 minus sale fees c£5k minus probate valuation £550k= £70k

Minus annual exemption (£11k) =£59k chargable gain

28% of £59k = £16,520

No penalties to pay , HMRC will be happy with the probate valuation as it's made them £16,520 richer. Executors really need to beg HMRC to allow them to alter the probate valuation. HMRC will have every incentive not to let them.

You could sue the executors for negligence.

If the solicitor is withholding £50k for CGT and his fees he's obviously charging a hefty fee for his bungling.

charlie2015

can any one give me any extra advice .another 6 months has gone by .still no information from PRS they are saying via solicitor they are waiting for CG TAX to be sorted .I went to a solicitor he told me it would cost me as much to take them to court .as I would gain. HMRC don't seem interested