IHT405 and inheriting parent's house - using sale price as the value at date of death?

itm2

My late mother left her house to her children in her will. I have obtained a RICS valuation, and am completing IHT405, but am unsure of the implications of answering this question under Box 12 of the form:
"Do you want to use the sale price as the value at date of death?"

We plan to sell the house as soon as we have a Grant of Probate, but of course have no idea how much it will sell for. The RICS valuation sounds about right, but could end up being a little on the high side in the current climate.

If we opt to use the sale price as the value at date of death, does this mean that IHT will initially be calculated (and paid) based on the RICS valuation, but that if the eventual sale price was significantly lower we would need to submit a form to HMRC to request an IHT rebate?

SeniorSam

It would mean that the sale price is used. rather than the RICS valuation. The question is to allow for a greater sale price being used rather than having to pay capital Gains Tax if the sale price was higher than the valuation price.

Keep_pedalling

I would only go for that option if the estate significantly below IHT territory as this will prevent a CGT liability should the house sell for more.

If the estate already has IHT to pay then I would not as any increase in the property value would be subject to more IHT rather than CGT which has a lower rate and you have a £12,300 exemption to use.

itm2

Thanks for the replies. The estate is above the IHT threshold, and we're hoping to sell the house for a little more than the  RICS valuation, so I guess we will answer "no" to that question.