House valuation for probate

ljayljay

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.

Have you received a clearance certificate from HMRC to confirm that the IHT paid has been accepted as accurate for the estate? If they haven't finalised acceptance, I would assume that any increase, or of course decrease, in the value of the estate would require completion of a Corrective Account document, thus further IHT payable in this case.

Contrary to my earlier response in this thread I employed a solicitor to deal with the IHT for my late uncle & they understandably used a RICS surveyor to value the property that will presumably have greater acceptance of accuracy than a quick estate agents market valuation. Although the property was eventually sold for a higher figure, this was approximately 18-24 months later & after the HMRC clearance certificate was issued so the tax office advised no further IHT was payable. The beneficiaries had to consider CGT liability instead but the increase worked out as £10K each & therefore within their allowances. 

garrabane said:

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

Must admit I'm not too clear on this, according to the guidance executors only have one CGT allowance but am thinking this isn't relevant if multiple executors are also the beneficiaries. However, I may be wrong & will also need to check this out. I am looking to sale my late mother's property soon on behalf of myself & 2 siblings & had no intention to change the land registration for the house into our names beforehand. 

Hopefully another poster will have the answer.

ljayljay

garrabane said:

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

Must admit I'm not too clear on this, according to the guidance executors only have one CGT allowance but am thinking this isn't relevant if multiple executors are also the beneficiaries. However, I may be wrong & will also need to check this out. I am looking to sale my late mother's property soon on behalf of myself & 2 siblings & had no intention to change the land registration for the house into our names beforehand. 

Hopefully another poster will have the answer.

Just noticed that my final observation could be confusing. If further IHT is payable to match the revised estate value CGT won't need to be considered in any case. So first deal with the IHT issue then it becomes clearer if CGT needs looking into.

Savvy_Sue

ljayljay said:

Must admit I'm not too clear on this, according to the guidance executors only have one CGT allowance but am thinking this isn't relevant if multiple executors are also the beneficiaries. However, I may be wrong & will also need to check this out. I am looking to sale my late mother's property soon on behalf of myself & 2 siblings & had no intention to change the land registration for the house into our names beforehand. 

Hopefully another poster will have the answer.

I think - and I am sure wiser voices will follow mine - that it is the ESTATE rather than the executors which only has ONE CGT allowance. 

My own experience: I was co-executor with a sibling for my parents, so on the second death we had a house to sell. If CGT had been payable, it might have been worth transferring it into the names of all five beneficiaries, each of whom had their own CGT allowance. As executors, sibling and I did not have an allowance each, because our only role in this was on behalf of 'the estate'. The fact that we were also beneficiaries was immaterial to our role as executors. 

ljayljay

Savvy_Sue said:

I think - and I am sure wiser voices will follow mine - that it is the ESTATE rather than the executors which only has ONE CGT allowance. 

My own experience: I was co-executor with a sibling for my parents, so on the second death we had a house to sell. If CGT had been payable, it might have been worth transferring it into the names of all five beneficiaries, each of whom had their own CGT allowance. As executors, sibling and I did not have an allowance each, because our only role in this was on behalf of 'the estate'. The fact that we were also beneficiaries was immaterial to our role as executors. 

Thanks, I think this is starting to stray into a different area to the OP question. I will investigate further & start a new thread on the CGT question after Probate unless someone beats me to it 

garrabane

Thanks all,

I have received a note from the HMRC stating that they will have no further interest in the estate after some point in mid may and if I haven’t heard from them by then they are happy that the correct tax has been paid (IHT was paid a couple of months back). 

House completion will be after this date which is why I thought this might go to CGT rather than IHT but this whole area is really unclear.