Market valuation for probate

PM49

I have obtained the market value for probate and can confirm that the estate falls well within the IHT allowance
However we have been advised that by spending some time and a reasonable amount of money we could increase the sale price considerably
Is it in order to
Get the work done prior to obtaining probate and put the higher market value in
Not get the work done but obtain probate but say the market value is expected to be the higher figure
Or should we place the lower figure and be prepared for a potential CGT charge if the increase is more than 11k - I feel it will be but in effect my sister and I inherit so we should have twice the CGT

Thanks for your help

getmore4less

For the estate all market values are at date of death.

konark

Don't forget that if you sell it you can deduct cost of improvements, legal and selling fees and the estate has its own CGT allowance. Better still if the recipient of the house in the will registers it in their name and lives there whilst renovations take place, then it will be cgt free.

PM49

Thanks for the info so far . Market option at date of death clarifies
The house is not actually left to someone
With a few legacies the estate is left 25 % to my sister and 75% to me , although I plan to split with her
We felt improving would mean the property would be more saleable quicker and might make us a bit of extra money - more the former in fairness
I had not realised the estate had a CGT allowance which I assume is the same 11k - can you confirm the rate for the CGT , personally I would myself be higher
Therefore have I understood this correctly
If the costs are £3k for sale purposes
Renovations 10k and the overall increase is 25 the gain would be classed as
25-13 = 12 -11 allowance so tax on the 1k

If I am being a bit dumb I apologise
Thanks again

Keep_pedalling

You can't assume you can claim the cost of renovations, stuff like decorating or replacing items like kitchen units or the heating system is classed as general maintenance.

PM49

No I appreciate that totally

But would appreciate help with my last post if anyone can assist

Yorkshireman99

PM49 wrote: »

No I appreciate that totally

But would appreciate help with my last post if anyone can assist

You can't offset any of the renovation against the capital gain. It might be worth getting professional valuation by a FRICS member. Estate agents valuations are notoriously inaccurate.

PM49

Thanks Yorkshireman - can I ask your advise going back to the original question ?

I am fine with the renovation not being allowed against gain - and the valuation is fair based on an identical property sale on the same road so I think we are ok on this too - we are nowhere near any IHT situation - hence decision not to pay for FRICS valuation.

I ve also taken on board that the valuation is taken as at the DoD

So assuming we then my sister and I take on the work - the estate still 'owns' the property and the CGT would be payable on any gain over the 11k - I would not expect a gain of at most 15k
Can you confirm that the estate has its own CGT allowance.
And the rate the CGT would be paid at

I was planning to take professional advice on this . I guess the less hassle option is to sell without any work getting done

Thanks again

Keep_pedalling

The estate does have the same allowance as an individual, but would you not be better transfering ownership to the 2 of you first before carrying out the work and selling as you could then take advantage of 2 sets of allowances.

Before you do this however you probably should get a proper valuation done, rather rely on the advice of an estate agent that you can make a profit on any improvements you carry out, as often it does not work out that way.

konark

CGT allowance is currently £11,100 Executors get this for the tax year in which the death occurred (assuming no capital gains before death), and for the next 2 tax years. You as an executor will pay CGT at 28%.

As for whether improvements are offsettable against CGT , it depends on the improvement. Simple cleaning, tidying and decorating gardening etc, replacing wear and tear will not count. Major refurbishment or extensions etc will be allowed , but check with tax office on what they will allow as it can be quite specific.

Yorkshireman99

If the gain is only likely to be that much then it is questionable if it is worth it. At present the rate is 28% but beware the budget next week.