Sitting Tenant

Inadilemma

Hi, Not entirely sure if this is the right forum but I’ll give it a go...part of my deceased mums estate is a house that has a sitting tenant. The lady in the house is a widow of 95+ years. As part of the valuation for probate do I put in a straight forward valuation of standard property price or do I somehow adjust to reflect the sitting tenant?

Thanks

Keep_pedalling

This is going to depend on the sort of tenancy agreement she has.

Whatever that is you need to obtain professsional valuations on her properties.

Uxb

...and not one from the local estate agent
you need a RICS qualified person - though it often is the case that the larger estate agents do have someone on their staff who is RICS qualified.

badmemory

I thought there was a specific discount applicable to residences with sitting tenants!

Yorkshireman99

badmemory wrote: »

I thought there was a specific discount applicable to residences with sitting tenants!

Oh that it was so easy. The OP MUST get professional valuations for all the properties by a RICS surveyor. Thiswillestablish the base for any future CGT and IHT calculations..estate agent’s guesses are worth what you pay for them.

Keep_pedalling

badmemory wrote: »

I thought there was a specific discount applicable to residences with sitting tenants!

No it is still based on open market value. If the current tenant has been there prior to 1989 she may have a protected tenancy, which means she cannot be evicted, and the house value is likely to be much lower than one with vacant possession, or with less secure tenants.

A RICS surveyor will be able to give a market value which will take into account the current tennant.

Claiming the lower market rate could backfire in the long run, as depending on the value of the estate CGT could carry a higher burden than IHT when the house is eventually sold.

Inadilemma

I’ve been getting written ‘valuations for probate’ from Estate Agents, is this not good enough then judging by comments? It’s a good point re the capital gains tax.....must admit I didn’t think about that so in theory it doesn’t really matter as you’re stuffed either way.

I’ve a flat, shop and house to get valued. The shop I’ll get specialist valuations but the flat and house I’ve just gone with standard estate agents. Think I’ll just forget about the sitting tenant and take the value as it is. The sitting tenant is about 95 so I doubt it would make much difference anyway.

Yorkshireman99

Inadilemma wrote: »

I’ve been getting written ‘valuations for probate’ from Estate Agents, is this not good enough then judging by comments? It’s a good point re the capital gains tax.....must admit I didn’t think about that so in theory it doesn’t really matter as you’re stuffed either way.

I’ve a flat, shop and house to get valued. The shop I’ll get specialist valuations but the flat and house I’ve just gone with standard estate agents. Think I’ll just forget about the sitting tenant and take the value as it is. The sitting tenant is about 95 so I doubt it would make much difference anyway.

You need to remember that HMR&C could penalise you if you make an incorrect valuation and as executor you cab personally liable. Also the base value is crucial and the CGT rates can change. It would be folly to just do a sloppy job. On your head be it!

Owain_Moneysaver

Inadilemma wrote: »

The sitting tenant is about 95 so I doubt it would make much difference anyway.

Depending on the tenancy type, their descendants may have the right to inherit the tenancy on the same terms.

Yorkshireman99

Yorkshireman99 wrote: »

You need to remember that HMR&C could penalise you if you make an incorrect valuation and as executor you cab personally liable. Also the base value is crucial and the CGT rates can change. It would be folly to just do a sloppy job. On your head be it!

You can’t just forget about the sitting tenant! You really MUST get some paid for legal advice otherwise you could end up in whole heap of trouble.

Inadilemma

It’s a minefield all this. Thanks for the responses....I’ll give it all to the solicitors to sort out....much easier. Thanks again.