Nan's Estate undervalued

The_Shaker

Hi,

I have today received Grant of Probate for my Nan's estate which has taken about 12 weeks to come through.

I am an executor and beneficiary of the estate and calculated (after looking at her bank accounts and getting the house valued) that the estate was worth about £140k and this is what we applied for on the Grant of Probate.

Since we applied we were told that the house was worth more than originally anticipated and we have found various other monies that have now been added to her bank account.

We now value the estate at around £180k, but on the paperwork it says that the net value of the estate applied for should not exceed £138k.

Do I need to apply for another Order of Probate for £180k to replace the one I have for £138k?

Appreciate any advice on this matter.

MichelleUK

Do not worry about, at those levels, no inheritance tax is due, so HMRC are not interested at all, just carry on as you would have before using the current probate certificate.

Yorkshireman99

The_Shaker wrote: »

Hi,

I have today received Grant of Probate for my Nan's estate which has taken about 12 weeks to come through.

I am an executor and beneficiary of the estate and calculated (after looking at her bank accounts and getting the house valued) that the estate was worth about £140k and this is what we applied for on the Grant of Probate.

Since we applied we were told that the house was worth more than originally anticipated and we have found various other monies that have now been added to her bank account.

We now value the estate at around £180k, but on the paperwork it says that the net value of the estate applied for should not exceed £138k.

Do I need to apply for another Order of Probate for £180k to replace the one I have for £138k?

Appreciate any advice on this matter.

Whilst it does not affect the IHT position you do need to revise the property value if there is a property included in the estate. This is because any future capital gain calculation will us the declared Probate value as the starting point.

The_Shaker

Thanks, when you say 'revise the property value' what do you mean? Who do I need to notify?

Yorkshireman99

Exactly. The value of any houser recorded for probate needs to be amended. Simply write and tell HMR&C and the Probate Office. They may ask for revised forms. It is an everyday occurrence for them. If there is no property then it should still be reported.

MichelleUK

Yorkshireman99 wrote: »

Whilst it does not affect the IHT position you do need to revise the property value if there is a property included in the estate. This is because any future capital gain calculation will us the declared Probate value as the starting point.

HMRC do not ascertain the value of a property UNLESS inheritance tax is payable. They have no interest whatsoever in this case, based on the OP's figures. There is no need to write to anyone.

The value used for a property that has not been involved in an estate that has paid any IHT, is the open market value on the date of death. What is shown on the probate form, is irrelevant in this case, AS IT HAS NOT BEEN ASCERTAINED.

Yorkshireman99, over the years this has come up many times and I have even given you links to HMRC guidance on the matter - why do you still advise this when you know it to be incorrect?

If it makes the OP feel better, by all means post off letters, but they are totally unnecessary.

getmore4less

As above the value gets ascertained if needed during the cgt return when sold.

What is happening to the house?
Being sold as part of the estate or are you going to keep it?

Yorkshireman99

MichelleUK wrote: »

HMRC do not ascertain the value of a property UNLESS inheritance tax is payable. They have no interest whatsoever in this case, based on the OP's figures. There is no need to write to anyone.

The value used for a property that has not been involved in an estate that has paid any IHT, is the open market value on the date of death. What is shown on the probate form, is irrelevant in this case, AS IT HAS NOT BEEN ASCERTAINED.

Yorkshireman99, over the years this has come up many times and I have even given you links to HMRC guidance on the matter - why do you still advise this when you know it to be incorrect?

If it makes the OP feel better, by all means post off letters, but they are totally unnecessary.

Just because you keep repeating something does not mean you are correct. The paid for, professional, advice from a RICS surveyor that I received was as I have said. I place far more credence on that than what you, or anyone else on a forum says. In detail the advice I received was that HMR&C would use the value declared for probate as definitive for the base value. Furthermore it was pointed out that it is much easier to establish a value earlier rather than later. For the sake of a little effort andf some stamps it is foolish not to do so. If there is any future query it is going to cost far more to sort out.

MichelleUK

Yorkshireman99 wrote: »

Just because you keep repeating something does not mean you are correct. The paid for, professional, advice from a RICS surveyor that I received was as I have said. I place far more credence on that than what you, or anyone else on a forum says. In detail the advice I received was that HMR&C would use the value declared for probate as definitive for the base value. Furthermore it was pointed out that it is much easier to establish a value earlier rather than later. For the sake of a little effort andf some stamps it is foolish not to do so. If there is any future query it is going to cost far more to sort out.

Absolutely....relying on the advice of faceless people on forums is a very dangerous thing to do and should never be advised without the OP doing their own research into issues that have been raised, you could become the hapless victim of an armchair lawyer or worse!

Often, very knowledgeable qualified people give their spare time to assist on these forums, steering people in the right direction. Sadly, also there are people who, with no malice intended, assert their personal views as fact.

As a qualified accountant, I often help with advice on several forums on MSE when I feel that my knowledge and experience will be of help. One thing that I do make sure of, is that (call it professional pride if you like) I never answer a question unless I am 100% sure that I am correct of my facts. If I am not 100% sure, I keep schtum! :rotfl: