Probate sale and beneficiaries

getmore4less

flopsy1973 said:

xylophone said:

Also the price we got is around 25k more than valuation on probate application so how do we stand on CGT since the money is going to be split? 

 I can't remember the probate value on house.

Then how do you know that the sale price is  around 25k  more than the probate valuation?

Has the sale of the house actually completed?

No the sale of house has not completed just offer accepted,  I am in middle of finding solicitor to deal with house sale.
yes i understand the house is still part of estate but when i get the funds will there be a CGT liability ? as administrator of estate i will be deducting expenses and giving my brother his half ? 
Can i take my sons part of it directly out of house sale money or will it have to come as gift from me and my brother after we split it ?
sale price is 185K i remember putting either 155 or 165K on valuation when applying for probate can i find this out from probate office do i need that value ?
thanks
 

As administrator why are you not keeping proper inventory and account records? 

How was the property valued?
After 4 years not unusual to have a change, if there was no IHT the values will not have been ascertained so here is room for adjustments if the valuation at the time was wrong.

Depending where you are in administration determines if you can use your individual CGT allowances or just the estates
(it does not  require putting in your names)

flopsy1973

I had a verbal valuation from a EA what sort of range it should be. 
Yes I have account that is purely for paying in money from the estate
Where could I get that probate value from? the probate office I sent application to ? 

DiamondLil

@flopsy1973 - my mother's house sold for £30000 more than the probate valuation. HMRC informed us that, because probate had been settled, this £30000 would become a Capital Gains Tax liability on the beneficiaries. Which made any tax due the responsibilty of each individual when filing tax returns. In our cases, the liability was nil because the £30000 was divided by the number of beneficiaries which brought the individual liabilities well below the annual CGT alowance per individual.

flopsy1973

DiamondLil said:

@flopsy1973 - my mother's house sold for £30000 more than the probate valuation. HMRC informed us that, because probate had been settled, this £30000 would become a Capital Gains Tax liability on the beneficiaries. Which made any tax due the responsibilty of each individual when filing tax returns. In our cases, the liability was nil because the £30000 was divided by the number of beneficiaries which brought the individual liabilities well below the annual CGT alowance per individual.

When is probate considered finished surely until the assets of estate have been sold and distributed it carries on ?  
I have not taken any of expenses out either yet after that it will  not be much of gain
Where do I get the probate figure from ? 

DiamondLil

No, probate is finished the moment it's signed off and granted. The deceased's posessions (house etc) can then be sold and, once all liabilities (funeral cost, councill,tax, utility bills,etc) and debts (if any) are paid, then the balance can be distributed among the beneficiaries.  You should have copies of the forms and figures you submitted to the probate office ?

greatcrested

1) There is the date Probate is granted by the Probate Office. Until then, most bank accounts are frozen and a proprty sale is (usually) impossible. Depending on the value of the Estate, if Inheritance Tax is due, this must be paid to HMRC before the PO will grant Probate.

2) Then there is the date the Estate is wound up by the Executers/Administrators, which could be many months later when all the assets have been sold, debts have been paid,and the remaining money in the Estate distributed to the Beneficiaries.

Before applying for Probate, (1 above), the Ex/Admin should value the Estate (ie all the bank acounts, investments, jewelry, personal possessions, cars/yachts/helicopters, and property. You can either work out the value of these yourself, or pay an expert. For property, it's worth paying an RICS surveyor for a written valuation unless it's clear that the total Estate value is well below any Inheritance Tax liability. Naturally HMRC will look more closely where the value is just below the level where IHT would become due, and they might refer the property to the District Valuer to check you've accurately valued it.

Hopefully you've been keeping detailed and accurate accounts of all the income and expenditure of the Estate since the date of death. It's helpful (though not legally required) to have a separate Estate bank account for this purpose.

Sea_Shell

Has your brother realised (been told) that he is due 50% of the total estate, not 50% of the estate less £50k.

Is he still happy to gift £25k?

He might change his mind once the £££ hits his account and he has to part with it!

flopsy1973

greatcrested said:

1) There is the date Probate is granted by the Probate Office. Until then, most bank accounts are frozen and a proprty sale is (usually) impossible. Depending on the value of the Estate, if Inheritance Tax is due, this must be paid to HMRC before the PO will grant Probate.

2) Then there is the date the Estate is wound up by the Executers/Administrators, which could be many months later when all the assets have been sold, debts have been paid,and the remaining money in the Estate distributed to the Beneficiaries.

Before applying for Probate, (1 above), the Ex/Admin should value the Estate (ie all the bank acounts, investments, jewelry, personal possessions, cars/yachts/helicopters, and property. You can either work out the value of these yourself, or pay an expert. For property, it's worth paying an RICS surveyor for a written valuation unless it's clear that the total Estate value is well below any Inheritance Tax liability. Naturally HMRC will look more closely where the value is just below the level where IHT would become due, and they might refer the property to the District Valuer to check you've accurately valued it.

Hopefully you've been keeping detailed and accurate accounts of all the income and expenditure of the Estate since the date of death. It's helpful (though not legally required) to have a separate Estate bank account for this purpose.

It has been approx 4 yrs since my mum died and I have list of all payments and expenses. The running expenses of the house can be deducted from this house money?   Estate was just below IHT value and house is last thing to sort out and be shared with my brother. Then we can give my son his bit but what about CGT liability on this ?  I did take copy of of probate form but typically cannot find it now for values? 

greatcrested

flopsy1973 said:

greatcrested said:

1) There is the date Probate is granted by the Probate Office. Until then, most bank accounts are frozen and a proprty sale is (usually) impossible. Depending on the value of the Estate, if Inheritance Tax is due, this must be paid to HMRC before the PO will grant Probate.

2) Then there is the date the Estate is wound up by the Executers/Administrators, which could be many months later when all the assets have been sold, debts have been paid,and the remaining money in the Estate distributed to the Beneficiaries.

Before applying for Probate, (1 above), the Ex/Admin should value the Estate (ie all the bank acounts, investments, jewelry, personal possessions, cars/yachts/helicopters, and property. You can either work out the value of these yourself, or pay an expert. For property, it's worth paying an RICS surveyor for a written valuation unless it's clear that the total Estate value is well below any Inheritance Tax liability. Naturally HMRC will look more closely where the value is just below the level where IHT would become due, and they might refer the property to the District Valuer to check you've accurately valued it.

Hopefully you've been keeping detailed and accurate accounts of all the income and expenditure of the Estate since the date of death. It's helpful (though not legally required) to have a separate Estate bank account for this purpose.

It has been approx 4 yrs since my mum died and I have list of all payments and expenses. The running expenses of the house can be deducted from this house money?   Estate was just below IHT value and house is last thing to sort out and be shared with my brother. Then we can give my son his bit but what about CGT liability on this ?  I did take copy of of probate form but typically cannot find it now for values? 

As already explained, as administrator you keep tabs on everything related to the managing of the Estate up till the point where it is wound up. That means all bills paid, debts paid off, income received (was the property rented out?), interest/dividends earned on savings/investments, cash received from any sales (including property) etc.

It also obviously includes IHT paid (though you say this did not apply) and CGT if appropriate.

Once ALL that is done, you wind up the Estate by distributing the remainder to the Beneficiaries, and circulating the full Estate accounts covering the period date of death to date of winding up.

Then you can give away whatever gifts you and your brother wish.

As for the property Probate value, I'm afraid I have no idea what you declared it to be!

getmore4less

 flopsy1973 said:

DiamondLil said:

@flopsy1973 - my mother's house sold for £30000 more than the probate valuation. HMRC informed us that, because probate had been settled, this £30000 would become a Capital Gains Tax liability on the beneficiaries. Which made any tax due the responsibilty of each individual when filing tax returns. In our cases, the liability was nil because the £30000 was divided by the number of beneficiaries which brought the individual liabilities well below the annual CGT alowance per individual.

When is probate considered finished surely until the assets of estate have been sold and distributed it carries on ?  
I have not taken any of expenses out either yet after that it will  not be much of gain
Where do I get the probate figure from ? 

There is a point in estate administration (After the grant and before final distribution)where the residual become a known quantity
the beneficiaries can use their CGT allowances, this can be before the house is sold and without the property going into their names, you need to check the rules for when this is