Probate Granted - Assent needed?

LadyEvoDriver

Quick bit of background. Father died in December, 3 siblings. IHT paid and Grant of Probate has been obtained. Cash buyer found for property and currently having survey done.
House sold for £50k more than IHT valuations. This puts us in the position of having to pay Capital Gains Tax.
Solicitor has suggested that to avoid some of the capital gains tax, that an Assent could be used. Two questions:
1. Why would we need an Assent when we already have a buyer and could pay CGT out of the money left in the bank account? Would obtaining an Assent hold up the sale?
2. What benefit is there to having an Assent? If normal expenditure such as estate agents and legal fees are taken off this additional money anyway, would we not have to still pay at 28%? Two out of the 3 siblings are high rate tax payers, one is not. Would this make a difference to the CGT that is paid? Talk about 'allowances' was in the email from solicitor but we're also wary of incurring any more legal fees or fees for the Assent itself.
Any help would be appreciated before we end up spending another few hundred with a conveyancer for something we don't need!

xylophone

Only one exempt amount for the estate.

https://www.gov.uk/government/publications/rates-and-allowances-capital-gains-tax/capital-gains-tax-rates-and-annual-tax-free-allowances

Each individual has his own exempt amount.

https://www.thegazette.co.uk/all-notices/content/100719

Thrugelmir

LadyEvoDriver wrote: »

House sold for £50k more than IHT valuations.

Who performed "valuations"?

That's a large jump in value in a matter of a few weeks.........

LadyEvoDriver

xylophone wrote: »

Each individual has his own exempt amount.

So, that means that despite the fact we've inherited the house and paid IHT on the assets, we can now pretty much claim £11,300 each before we paid CGT??? Have I read that correctly? Sorry, finding this all very confusing.

LadyEvoDriver

Thrugelmir wrote: »

Who performed "valuations"?

That's a large jump in value in a matter of a few weeks.........

3 different estate agents. Valuations were £150k apart from bottom to top one. Seems because the house hasn't been sold in the past 55 years, they had to 'guess' the price. Top one won! However, mid of 3 was taken for probate.

Thrugelmir

Hope that's all in writing. In case the HMRC questions the figure. Particularly if you immediately marketed the property at a higher value than probate.

I'd always recommend using a RICS surveyor to prepare a report. Then there's something tangible to base arguments with the District Valuer with. Normally they are accomodating and err on the side of their clients.

You may have paid IHT. However your role as executor isn't over yet.

LadyEvoDriver

Thrugelmir wrote: »

Hope that's all in writing. In case the HMRC question the figures.

All done through Probate solicitor so definitely above board.

Thrugelmir

LadyEvoDriver wrote: »

All done through Probate solicitor so definitely above board.

Not suggesting it wasn't. Just that the HMRC are akin to rottweilers if they sniff under declared asset values.

What was the selling price of the property out of curiosity. As the % can be a factor.

LadyEvoDriver

Thrugelmir wrote: »

As the % can be a factor.

It was 5% more than the IHT mid-valuation, so not huge.

Thrugelmir

LadyEvoDriver wrote: »

It was 5% more than the IHT mid-valuation, so not huge.

I concur that's small.

Tom99

[FONT=Verdana, sans-serif]You may have obtained probate but its very likely that the inheritance tax office wrote to you and said they will now look at the figures you have provided.

[/FONT] [FONT=Verdana, sans-serif]They may refer your valuation to the Valuation Office which may take months and if you have sold the property only a few months after the probate valuation date the VO will be of the opinion that in today's flat market the sale value should be taken as the probate value.

[/FONT] [FONT=Verdana, sans-serif]You have to wait for a clearance letter or certificate from the IHT Office to know for sure the probate value and thus whether any CGT is payable.

[/FONT] [FONT=Verdana, sans-serif]If you do agree a lower probate value then and the property is sold by the estate, the estate has one £11,300 annual allowance and pays CGT at the higher rate of 28%. You can also set off disposal costs and a percentage of the probate value as "acquisition costs"

[/FONT] [FONT=Verdana, sans-serif]You can assent the beneficial interest to the three beneficiaries. You don't have to transfer the legal interest only the beneficial interest so there is no need to register the transfer with the land registry, that should save time and money.

[/FONT] [FONT=Verdana, sans-serif]Then each beneficiary will report their own CGT based on 1/3rd of the values but with each having a £11,300 allowance.

[/FONT] [FONT=Verdana, sans-serif]Work out how much CGT you might save then decide whether to spend the extra legal fees, but you might end up having to agree a probate value equal to the sale value so no CGT would be payable.[/FONT]