Family home bequeathed to children

Lisa0501

My father recently passed away and am attempting probate myself. I have IHT205 to complete as his house is valued 325-340 and approximately £5k in his bank account. My understanding is that the family home being bequeathed to his 2 surviving daughters would bring an extra allowance of £100k on top of the £325k IHT limit. Am I correct in just completing the IHT 205? Any help would be appreciated. My mother passed away 10 years ago and I could obtain IHT217 to claim her allowance but just wanted to simplify things .......if I can.

Yorkshireman99

Lisa0501 wrote: »

My father recently passed away and am attempting probate myself. I have IHT205 to complete as his house is valued 325-340 and approximately £5k in his bank account. My understanding is that the family home being bequeathed to his 2 surviving daughters would bring an extra allowance of £100k on top of the £325k IHT limit. Am I correct in just completing the IHT 205? Any help would be appreciated. My mother passed away 10 years ago and I could obtain IHT217 to claim her allowance but just wanted to simplify things .......if I can.

Whatever else happens you MUST gets a paid for RICS valuation done establish a true value for possible IHT and CGT purposes. Estate agents guesses will not do.

Lisa0501

I have 3 written valuations by different estate agents . They all said market at 340 in the hope of achieving 325, therefore i thought i would be well under the 425 allowance if my original thinking is correct. Havent even thought about CGT, if it makes any difference i moved into family home about 2 years ago to care for my father.

getmore4less

This might help
https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm06000

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm06024

Yorkshireman99

Lisa0501 wrote: »

I have 3 written valuations by different estate agents . They all said market at 340 in the hope of achieving 325, therefore i thought i would be well under the 425 allowance if my original thinking is correct. Havent even thought about CGT, if it makes any difference i moved into family home about 2 years ago to care for my father.

Estate agents guesses are of no worth. However given the IHT level you should be OK with that. The potential problem can arise in future with any CGT issues if, and when the beneficiaries dispose of their share.

Keep_pedalling

You cannot claim the residence nil rate band on IHT205 you will have to complete IHT400 for that. It will be simpler to to claim the transferable nil rate band from your mother using IHT205 + 217.

As YM has said the risk is with an undervaluation that could lead to a capital gains tax hit. That could still happen with a RICS valuation if 2 people get in a bidding war for the house,

Sea_Shell

Are you and your sister on the same page regarding what happens next to the property?

Lisa0501

Yes the house needs so much work doing to it and not just cosmetic changes. It is a family home and too big for me to maintain and live in, neither do I want to. It will be sold in due course . We are both in agreement with that.
I am not trying to claim residence nil rate band just want the 100k allowance on top of 325k iht. Think it might just be easier to complete the 217 as well. Many thanks for all that took time to reply.

Yorkshireman99

Lisa0501 wrote: »

Yes the house needs so much work doing to it and not just cosmetic changes. It is a family home and too big for me to maintain and live in, neither do I want to. It will be sold in due course . We are both in agreement with that.
I am not trying to claim residence nil rate band just want the 100k allowance on top of 325k iht. Think it might just be easier to complete the 217 as well. Many thanks for all that took time to reply.

Noted and thanks. In which case you both need to take paid for professional advice on ALL the consequences of IHT and future CGT. You both will have a potential tax liability but this can be minimised but is starts with the base value at the date of death declared for probate purposes. You can’t afford to rely just on the advice here, good as it may be. It mightcpst a couple of thousand but the RICS surtveyor can save you at least that.

getmore4less

I am not trying to claim residence nil rate band just want the 100k allowance on top of 325k iht.

What is this is £100k you keep referring to?

Flugelhorn

getmore4less wrote: »

What is this is £100k you keep referring to?

Is it the current value of the Family Home Allowance?