Inheritance Tax – house price valuations and coronavirus

CharlesBluebond

simon_clarke said:

Hi everyone. First post here. My mum has just passed away from the coronavirus – and I've realised there may be problems with her estate because of the effects of the pandemic and the lockdown strategy. Has anyone seen any advice about this? For example, I have to start paying the inheritance tax within 6 months – but how can I get an accurate valuation of her house [the main asset] when the housing market is frozen? I am worried that I will be forced to pay tax based on a pre-lockdown valuation and then house prices will go down significantly for a long period. 
Not sure if this is the right section to post in – thanks for any response...

Firstly I would like to express my condolences for your loss to this awful pandemic. I presume that you have calculated properly the approx amount of Inheritance tax that is due.

Yes there is a difficulty in that you should get a "Red book Valuation" from the RICS but because of the lockdown no one can come out to do it. You could declare everything else but in relation to the property record a provisional valuation. This allows it to be changed later when you get the RICS valuation done.

The provisional valuation can come from a local agent if they are willing to help. As an IHT advice specialist I am always a bit disappointed when people end of pay tax that they could easily have avoided with proper advance planning.

I would suggest that you get experienced advice on your own Estate and consider getting a deed of variation on your mothers Estate and actually place the assets into a Trust from which the beneficiaries including you can take interest free loans. This stops the value of your mothers Estate being added to yours and thus avoids adding to or creating an IHT problem for your children.

I hope that helps.