Estimating IHT

Yazmina

Lots of useful information here. Thank you for all the replies. 

Thrugelmir

Keep_pedalling said:

On you point about IHT and CGT, if you under estimate the actual value but sell for a a lot more shortly after probate HMRC will be looking to adjust the IHT valuation rather than letting you get away with paying CGT instead. 

Not if you obtain a proper RICS valuation report. This runs into considerable detail and lists comparable properties in arriving at the value the surveyor places on the property. When selling my late mothers house I had the issue of potential redevelopment value to contend with. Ultimately the property did sell at well above probate value. With 4 parties bidding for the property. HMRC were happy to agree to CGT on the excess achieved after deduction of costs and expenses. 

Yazmina

One other thing.  There are some shares held by a high street bank. I managed to get access to the account by showing the death certificate at a branch, and the shares have now been transferred into my name. Should I declare these as part of the estate on the date of death, or not as they are now mine? 

Thanks. 

Keep_pedalling

Yazmina said:

One other thing.  There are some shares held by a high street bank. I managed to get access to the account by showing the death certificate at a branch, and the shares have now been transferred into my name. Should I declare these as part of the estate on the date of death, or not as they are now mine? 

Thanks. 

You declare the value on the date of of the death. You can obtain historic share prices on this link.

https://uk.finance.yahoo.com/quote/YHOO/history/

You will see 4 prices for each trading day, opening, closing, high and low and from those last 2 figures you need to work out the quarter up value (see link)

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm18093

if the deceased dies on a week-end or a bank holiday you can chose either the preceding or following working days value.

RAS

They are part of the estate and need to be declared.

Yazmina

Another thought: once everything is done, will I need to pay income tax on the final sum transferred to me? 

Savvy_Sue

Yazmina said:

Another thought: once everything is done, will I need to pay income tax on the final sum transferred to me? 

No. If Inheritance tax is due that will be paid before you get anything. 

Yazmina

p00hsticks said:

Yazmina said:

Thrugelmir said:

Any fees incurred can be claimed against the estate before the proceeds are distributed. 

Would this include the surveyor fees, estate agents and the council tax?  There are no exemptions for empty houses in the borough.

Thanks.

It's not an general 'empty house' exemption that you are concerned with - there is an Class F exemption that applies when a property has been left empty becasue the council tax payer has died - it ri\uns from the date of death until six months after probate has been obtained unti lthe proeprty is sold or occupied.

The link below is for mis-Sussex council but my understanding is that this is an England wide exemption and not applicable at the whim of indovidial councils

https://www.midsussex.gov.uk/revsandbens/council-tax/council-tax-exemptions/class-f-property-left-empty-as-the-council-tax-payer-is-deceased/

The house is not exactly empty.  There is a lodger still living there.  He is looking for a new room but is not responsible for the council tax.  As he is around 60 - 70 years old, I feel I need to have a little patience with him and wait for him to find new accommodation.  Does this make me responsible for the council tax until he moves out, even though I am not yet legally responsible for the property?  Or can I apply for a class F exemption anyway?

Savvy_Sue

Yazmina said:
The house is not exactly empty.  There is a lodger still living there.  He is looking for a new room but is not responsible for the council tax.  As he is around 60 - 70 years old, I feel I need to have a little patience with him and wait for him to find new accommodation.  Does this make me responsible for the council tax until he moves out, even though I am not yet legally responsible for the property?  Or can I apply for a class F exemption anyway?

the house isn't empty at all, by that description! 

Are you the executor / applying for letters of administration because your mother didn't leave a will? I think if you are, then that does make you responsible for the property - if someone else is fulfilling that role then I believe they would be responsible, and also for arranging insurance for the property. 

I'd phone your local Council Tax dept and ask for some guidance. If nothing else, you should now be able to get a 25% single person occupancy discount. 

Goodcitizen1

Hi,
you should also be aware that if you sell the house for less than the valuation used in the IHT calculation you can apply to have the value updated and a refund of the excess tax paid. This can also apply to other assets like shares if they are sold at a lower value than they had on the date of death. You will have the check the guidance for the timescales allowed.