Is there a probate fee when you sell a house if there was a will?

JGB1955

mjm3346 said:

Having sold after probate the only costs incurred were the usual ones associated with a house sale and probate made no difference.

... unless CGT becomes an issue...

maman

I realise you're paying for the solicitor to deal with this for you but you really should have been kept informed. 

I've been an executor and applied for probate myself. Put simply, it's like drawing up a balance sheet of all assets so all the figures for property, bank accounts, other assets like jewellery etc and then subtracting any charges like the funeral and any outstanding bills.

Personally I'd want to know what figures the solicitor has submitted. I know property prices have been fluctuating, depending on where you are, but how do you know the party interested in the house is offering a fair price if you don't know what the solicitor valued it at. 

Savvy_Sue

Just one question: do you currently live in the house? If you do, no CGT will be due on sale.

james_uk

No i am living in my own home, that house is now empty

thegreenone

@james_uk I agree that your solicitor should be keeping you informed.  I understand the above who say DIY it but it's daunting if, like me, you are not a good form-filler-outerer and need the back up of those that know.

History of my fear of form filling (part. HMRC):  my husband is SE and HMRC hounded us for a year saying we owed them 35K (IR35 for those that know that joy!).  After a year of sleepness nights and my husband losing weight and his hair turning grey, out of the blue, HMRC sent us a very large cheque.  They were completely wrong about his IR35 status and we have since spent money on professionals.  We never want to go through that again.

Froglet

BooJewels said:

I must admit, several things concern me about your post. 

Firstly, in order to obtain probate you would already have had the house valued for the IHT aspect of the process, so either you, or the solicitor would have already got a valuation.  If you have the grant document - what value does it give the estate - that will be made up of all the assets you told the lawyer about, including the house value and any cash sums in the estate etc., minus funeral costs and any debts that need to be paid.

Secondly, paying a grand for someone to do that process for you makes my heart bleed with simple estates.  It's a bit of detective work and time with a calculator and pencil and an hour filling a form in - either on line or a paper copy.  There's a fee for the process and it costs to get copies of the grant, but I paid around 200 quid ish.

You need the grant in order to sell an estate property, so you certainly needed to have it done if you want to sell.  It's basically a government court that look at the will, look at the tax position of the estate, check your ID and issue a little bit of paper with a pretty hologram on it (the court seal) that states to any interested parties that you're entitled to sell the property, get at monies in the bank, sell shares etc etc.  It's just proof of your legal right to do such things.

I wonder if the £8.5k someone else is having to pay is something like Capital Gains Tax?  If you tell the probate office on your form - for example - that the house is worth say £200k and then sell it for £300k - you'll need to pay some tax on the amount you gained since applying for probate - so some tax on the £100k you gained.  There's an allowance and you pay tax on the balance.  Maybe that's why probate was mentioned by your friend, maybe they sold for more than they told probate and now need to pay tax on their gain?

I didn't know this about the capital gains tax.My mother has just died and my sister is not well enough yet to move out of the property where she has been living with Mum for 20 years.so we were going to get it valued for the IHT form then get probate,and then it would be put up for sale when ready.So even though I know IHT won't be payable,CGT is ? What is the allowance before you pay it ?

p00hsticks

Froglet said:

BooJewels said:

I must admit, several things concern me about your post. 

Firstly, in order to obtain probate you would already have had the house valued for the IHT aspect of the process, so either you, or the solicitor would have already got a valuation.  If you have the grant document - what value does it give the estate - that will be made up of all the assets you told the lawyer about, including the house value and any cash sums in the estate etc., minus funeral costs and any debts that need to be paid.

Secondly, paying a grand for someone to do that process for you makes my heart bleed with simple estates.  It's a bit of detective work and time with a calculator and pencil and an hour filling a form in - either on line or a paper copy.  There's a fee for the process and it costs to get copies of the grant, but I paid around 200 quid ish.

You need the grant in order to sell an estate property, so you certainly needed to have it done if you want to sell.  It's basically a government court that look at the will, look at the tax position of the estate, check your ID and issue a little bit of paper with a pretty hologram on it (the court seal) that states to any interested parties that you're entitled to sell the property, get at monies in the bank, sell shares etc etc.  It's just proof of your legal right to do such things.

I wonder if the £8.5k someone else is having to pay is something like Capital Gains Tax?  If you tell the probate office on your form - for example - that the house is worth say £200k and then sell it for £300k - you'll need to pay some tax on the amount you gained since applying for probate - so some tax on the £100k you gained.  There's an allowance and you pay tax on the balance.  Maybe that's why probate was mentioned by your friend, maybe they sold for more than they told probate and now need to pay tax on their gain?

I didn't know this about the capital gains tax.My mother has just died and my sister is not well enough yet to move out of the property where she has been living with Mum for 20 years.so we were going to get it valued for the IHT form then get probate,and then it would be put up for sale when ready.So even though I know IHT won't be payable,CGT is ? What is the allowance before you pay it ?

Sorry for your loss. Capital Gains Tax is only potentially payable if you aren't living in the property as your main home and you sell it for more than the value you have stated on the probate form. There is currently a CGT Allowance of £12.300.

Assuming that your mother's will leaves the house to you and your sister and doesn't provide for your sister to remain living there, then there are two ways of selling the house;

Either the estate sells it - in which case I believe the estate has a single CGT allowance so if the price sold for (less the expenses invovled in selling such as estate agents fees and solicitors conbeyancing expenses)  is more that £12,300 over what was put on the probate form, then the estate would need to pay some CGT.

The alternative is you get the property put into you and your sisters names befor selling it. This way you can each use your  individual CGT allowance against your half of the property - although if your sister stays living in the house until it is sold, she won't have to pay anything on her share as currently CGT doesn't apply when selling your main residence.

BooJewels

@Froglet - I don't know as much about it as others, so hopefully someone else will chime in to clarify. 

As I understand it (and I'm happy to be corrected), Capital Gains only applies if you sell it for more than you claimed it was worth during probate - i.e. you gain during that time period.  If your sister already resides there, then I don't think it applies to her, as it's her main residence.   

You only pay CGT on the amount of uplift in value, not the whole house price and each person is only responsible for their own share.  I think from memory the current allowance is something like £12,300.  So, for example, if the house sells for £20,000 more than you valued it for probate (as in our case, we applied for probate a while ago and house prices have gone up a chunk in that time, we're going to be borderline for paying some) and you and your sister share it equally, that's only 10k each, so CGT wouldn't be payable for either of you.

In the example I posted that you quoted, you'd have to have a gain of something like £100,000 per person to have to pay anything like £8,500 in CG tax.

BooJewels

Ah thanks @p00hsticks - we were obviously typing at the same time and I'm glad that your explanation was in line with mine.  I was hoping that I'd understood it correctly when checking for myself recently.

Froglet

p00hsticks said:

Froglet said:

BooJewels said:

I must admit, several things concern me about your post. 

Firstly, in order to obtain probate you would already have had the house valued for the IHT aspect of the process, so either you, or the solicitor would have already got a valuation.  If you have the grant document - what value does it give the estate - that will be made up of all the assets you told the lawyer about, including the house value and any cash sums in the estate etc., minus funeral costs and any debts that need to be paid.

Secondly, paying a grand for someone to do that process for you makes my heart bleed with simple estates.  It's a bit of detective work and time with a calculator and pencil and an hour filling a form in - either on line or a paper copy.  There's a fee for the process and it costs to get copies of the grant, but I paid around 200 quid ish.

You need the grant in order to sell an estate property, so you certainly needed to have it done if you want to sell.  It's basically a government court that look at the will, look at the tax position of the estate, check your ID and issue a little bit of paper with a pretty hologram on it (the court seal) that states to any interested parties that you're entitled to sell the property, get at monies in the bank, sell shares etc etc.  It's just proof of your legal right to do such things.

I wonder if the £8.5k someone else is having to pay is something like Capital Gains Tax?  If you tell the probate office on your form - for example - that the house is worth say £200k and then sell it for £300k - you'll need to pay some tax on the amount you gained since applying for probate - so some tax on the £100k you gained.  There's an allowance and you pay tax on the balance.  Maybe that's why probate was mentioned by your friend, maybe they sold for more than they told probate and now need to pay tax on their gain?

I didn't know this about the capital gains tax.My mother has just died and my sister is not well enough yet to move out of the property where she has been living with Mum for 20 years.so we were going to get it valued for the IHT form then get probate,and then it would be put up for sale when ready.So even though I know IHT won't be payable,CGT is ? What is the allowance before you pay it ?

Sorry for your loss. Capital Gains Tax is only potentially payable if you aren't living in the property as your main home and you sell it for more than the value you have stated on the probate form. There is currently a CGT Allowance of £12.300.

Assuming that your mother's will leaves the house to you and your sister and doesn't provide for your sister to remain living there, then there are two ways of selling the house;

Either the estate sells it - in which case I believe the estate has a single CGT allowance so if the price sold for (less the expenses invovled in selling such as estate agents fees and solicitors conbeyancing expenses)  is more that £12,300 over what was put on the probate form, then the estate would need to pay some CGT.

The alternative is you get the property put into you and your sisters names befor selling it. This way you can each use your  individual CGT allowance against your half of the property - although if your sister stays living in the house until it is sold, she won't have to pay anything on her share as currently CGT doesn't apply when selling your main residence.

Thank you for your reply.We actually have another sister as well,and we do intend to just sell it,Mum didn't make provision for my sister who is living there to stay.She couldn't afford to,and will need to rent privately most likely,as she has been on benefits for years.If CBT needs to be paid then we may delay the valuation,until at least she has her replacement hip done,as I know this,and probate take time.We thought probably next Spring would be a good time.