House valuation for probate

Kster

Hi people,

I'm needing a house valued for probate. I was just wondering what your opinions were about using an estate agent to do the valuation. Would that be advisable?

It's probably worth mentioning that the house and assets of the estate might be close to the inheritance tax threshold.

Thank you.

shiraz99

Unless the estate agent will do a probate valuation and have a RICS approved valuer you're more thank likely end up with a valuation for marketing/selling purposes, ie, a market appraisal rather than a true valuation for probate/IHT purposes. Look around for a local RICS probate valuer.

Marcon

Kster said:

Hi people,

I'm needing a house valued for probate. I was just wondering what your opinions were about using an estate agent to do the valuation. Would that be advisable?

It's probably worth mentioning that the house and assets of the estate might be close to the inheritance tax threshold.

Thank you.

If it's a fairly 'standard' house in an area where such properties are sold reasonably regularly, HRMC will almost certainly allow you to base a valuation on the average price of similar properties sold in recent months.

shiraz99 said:

Unless the estate agent will do a probate valuation and have a RICS approved valuer you're more thank likely end up with a valuation for marketing/selling purposes, ie, a market appraisal rather than a true valuation for probate/IHT purposes. Look around for a local RICS probate valuer.

Good advice if the property is somewhere where values are fluctuating a lot, or where there is little history of recent sales of similar properties.

shiraz99

The problem is that estate agents can't give true open market valuations, they need to use a RICS for that, as mentioned they can give market appraisals but these will likely be higher than the true value as they are aimed at what they'd consider the asking price rather than what the house will actually sell at. If you're going to be in a position where IHT is likely then I'd definitely get a paid for valuation done.

Thrugelmir

If in doubt use a RICS surveyor. They'll prepare a full detailed report to substantiate their valuation. HMRC will accept this without question. A number seemingly plucked out of the air is far more likely to be questioned. 

Kster

Thanks guys. I think that's answered my question.

ljayljay

Kster said:

Thanks guys. I think that's answered my question.

According to another of your posts it would appear that the estate is approx £500K & a IHT threshold of £1 million could apply, in which case I would have thought a RICS valuation was unnecessary...

https://forums.moneysavingexpert.com/discussion/6350036/iht-tax-threshold#latest

I was in a similar position & stuck with an estate agent valuation since IHT was not an issue. I just asked the agent to value at the top end of what the proerty could realistically be sold for so that I don't unwittingly end up with CGT instead. I guess this could still happen if the property goes for even more.

Ironically acting on behalf of other family members I had a RICS valuation done on my uncles property & it did sell for about £20K more. As it turned out there were two beneficaries so it was within their CGT allowances.

p00hsticks

What is the intention for the property ?

If it's going to be sold straight away then you could get several estate agents in to see what they say.

I may be wrong but I think I read in a previous recent thread that now if you intend selling the property as soon as you have probate you can indicate this to HMRC with an estimate and then later use the actual selling price ?

If you intend keeping the property but renting it out or using it as a second home I'd suggest getting a RICS valuation so that the value is documented for use in any later CGT calculations.

Linton

p00hsticks said:

What is the intention for the property ?

If it's going to be sold straight away then you could get several estate agents in to see what they say.

I may be wrong but I think I read in a previous recent thread that now if you intend selling the property as soon as you have probate you can indicate this to HMRC with an estimate and then later use the actual selling price ?

If you intend keeping the property but renting it out or using it as a second home I'd suggest getting a RICS valuation so that the value is documented for use in any later CGT calculations.

Agree on all points.  We had 2 estate agents valuationss, chose the higher one and the house actually sold for significantly more.  As poosticks says you can update an estimate.  HMRC dont care where you get the valuation from, if they disagree with it they will challenge it.  Under those circumstaces perhaps having a RICS estimate may help but as long as the estimate is reasonable it will probably be acceprted.

garrabane

We're in a similar situation. Estate had some IHT to pay - based the valuation on 3 estate agents valuation and what previous houses in the area had gone for. 

House looks likely to sell for approx £40k more than the IHT estimation. This would be about 6 months after death.

This is after probate has been granted and IHT paid - but before we've exchanged contracts etc...

Not sure whether I need to ring the HMRC and pay 40% tax on the full gain once the house is sold, or to pay CGT? If I pay CGT is this paid by the estate or by the beneficiaries ( using multiple CGT allowances ), and if it is to go to multiple beneficiaries do we need to do something to transfer the property to us before sale?

Advise online is vague at best - have done everything for probate and IHT myself so far but do I need to speak to a solicitor or an accountant to try and sort this out?

Thanks for any help

Keep_pedalling

garrabane said:

We're in a similar situation. Estate had some IHT to pay - based the valuation on 3 estate agents valuation and what previous houses in the area had gone for. 

House looks likely to sell for approx £40k more than the IHT estimation. This would be about 6 months after death.

This is after probate has been granted and IHT paid - but before we've exchanged contracts etc...

Not sure whether I need to ring the HMRC and pay 40% tax on the full gain once the house is sold, or to pay CGT? If I pay CGT is this paid by the estate or by the beneficiaries ( using multiple CGT allowances ), and if it is to go to multiple beneficiaries do we need to do something to transfer the property to us before sale?

Advise online is vague at best - have done everything for probate and IHT myself so far but do I need to speak to a solicitor or an accountant to try and sort this out?

Thanks for any help

Baring in mind the short timescales and the fact that you used EA valuations I would say that HMRC would consider additional IHT is owed rather than CGT.