Revaluing a house before distribution of the assets

dominoman

We valued the house for HMRC inheritance tax, and put it on the low side (lowest of 3 valuations we got).  That was over 6 months ago and the house prices in that area are up quite a bit now.  We may be several more months before probate is granted.

One person is getting the house and others are getting cash of the same value.  Should we revalue the house at a more realistic and up to date level before distribution of assets? 

naedanger

Are you the executor? 

I think the executor should to try and get all the beneficiaries who are affected by the valuation (probably all the residual beneficiaires) to agree. It would seem fairest to revalue unless the price was already firmly agreed. If agreement cannot be reached then the executor may have to consider selling in the open market.

Has the CGT position been considered? Is the person taking the house planning for it to become their main residence? 

Keep_pedalling

You may find HMRC challenging the value of the property if the estate is in or near IHT territory. Taking the lowest of the 3 values is not the right way about valuing an estate.

Mojisola

dominoman said:

We valued the house for HMRC inheritance tax, and put it on the low side (lowest of 3 valuations we got).  That was over 6 months ago and the house prices in that area are up quite a bit now.  We may be several more months before probate is granted.
One person is getting the house and others are getting cash of the same value.  Should we revalue the house at a more realistic and up to date level before distribution of assets? 

Were the other two beneficiaries happy with the property possibly being undervalued?

If they were then, they may not mind now that the house is worth more than their share.  (HMRC might be a different matter).

If the property was revalued, is there enough cash to balance the increased price or would the house have to be sold to share the estate evenly?

xylophone

If agreement cannot be reached then the executor may have to consider selling in the open market.

It seems that one beneficiary has been left the house as a specific legacy and may wish to live in it rather than sell it?

Mojisola

dominoman said:

One person is getting the house and others are getting cash of the same value. 

xylophone said:

If agreement cannot be reached then the executor may have to consider selling in the open market.

It seems that one beneficiary has been left the house as a specific legacy and may wish to live in it rather than sell it?

That's possible but the wording above made it sound like the estate is to be split three ways and the beneficiaries have decided that one should have the house and the other two cash of equal value.  I know a couple of families where the estate was split like this because one wanted to keep the house.

macman

If that were the case, then the issue wouldn't arise. I read this an an instance in which one of the beneficiaries has asked to purchase the property from the estate?