CGT who pays HMRC

4ideas

The estate falls under the £650K tax threshold. The probate was submitted with an incorrect substantially low property valuation, the property sold within 10 days of going on the market. The probate was submitted solely by one of the executor beneficiaries without informing the other other executor beneficiaries they would not be named on the probate but only as a beneficiary. The solicitors have exchanged contractors and the money for the property paid to the sole executor named on the probate, who then split the money equally and transferred the money into the beneficiaries bank accounts.

My questions are:-
1. There is potentially CGT on £90K who pays the tax to HMRC. Is it the responsibility of the person who submitted probate. Or do each of the beneficiaries pay separately.
2. The property was undervalued by approx £90K on the probate what is the process and likelihood of HMRC increasing the value of the property.

I hope someone can throw some light on the above questions.

xylophone

Any CGT due on a sale of an asset by the exor in the Administration Period should have been paid by the exor before distribution of the proceeds.

https://www.jrwca.com/news/inheritance-tax/inherited-assets-who-is-liable-for-capital-gains-tax/

JGB1955

Any executor who is not named on the Grant of Probate should have either previously agreed to

• reserve their powers or

• renounce their role.

Something doesn't sound quite right here :
4ideas said:

The probate was submitted solely by one of the executor beneficiaries without informing the other other executor beneficiaries they would not be named on the probate but only as a beneficiary. 

Marcon

JGB1955 said:

Any executor who is not named on the Grant of Probate should have either previously agreed to

• reserve their powers or

• renounce their role.

Something doesn't sound quite right here :
4ideas said:

The probate was submitted solely by one of the executor beneficiaries without informing the other other executor beneficiaries they would not be named on the probate but only as a beneficiary. 

Quite. What were they playing at?

getmore4less

Might actually be an IHT liability, with such a quick sale the probate valuation may need adjustment. 

4ideas

getmore4less said:

Might actually be an IHT liability, with such a quick sale the probate valuation may need adjustment. 

There is no IHT liability as allowance of two parents was combined to give £650K allowance

theoretica

4ideas said:

getmore4less said:

Might actually be an IHT liability, with such a quick sale the probate valuation may need adjustment. 

There is no IHT liability as allowance of two parents was combined to give £650K allowance

So the most promising route to take would be correcting the IHT valuation to remove the CGT question.

4ideas

Am I correct in stating the 2 executors who are also beneficiaries who are not named as executors on the Inheritance Tax estate report and grant of probate will not be taxed for CGT directly. That any taxes on the estate are paid by the executor named on both these forms. The situation was made worse as the executor completing the forms did not discuss what would be submitted and copies were only provided to the other executors 15 months after probate was submitted. By doing so we were unaware of the property undervaluation submitted and would have disputed that figure and now there is most likely CGT to pay, which is very unfair. 

getmore4less

Get the probate valuation fixed. 

EasySolution

Unfortunately s191 IHTA 1984 does not permit a revaluation of IHT value upwards to decrease the CGT bill.

Have a look at StonervIRC 2001