DIY Probate. Over value estate?

wicksee

getmore4less said:

Why was your base line on a house that sold probably over a year ago earlier without any adjustment?
From offer takes a few months to sell and get the actual sale price on land reg.

in most areas the market has been very buoyant since late last year

Has it sold yet?

until then you won't know the current value.

Because this is the first (and probably only time) i have ever done this, and i believed the Probate valuation was only significant for IHT purposes. As the value was nowhere near IHT threshold, i just took the nearest known valuation (which was the last sale of an identical house).
At that point in my life, I had not even considered CGT on any future sale, indeed at that point i didn't even know what CGT was!
My bad.

No it hasn't sold yet, it's not even on the market yet, but the estate agent has given me a valuation based on similar properties that have sold within the last few months.

wicksee

Question:
Is there a way to retrospectively alter the Probate valuation to a more accurate figure, or to declare a lower capital gain when the property is sold, based on an incorrect Probate valuation?
Obviously these values are well within the IHT threshold, this is purely about CGT. Unequivocally i am not trying to defraud the tax man.
I believe it's unreasonable to conclude that the house has inflated in price by £50,000 within the space of 6 months.

p00hsticks

I may be wrong, but I thought that I'd read somewhere that when the probate process was changed at the beginning of the year, they introduced an option within the application that allowed you to select for the actual sale price of a property to be used retrospectively if it was sold within a certain timeframe ?

uknick

It might have changed since 2013, but after my partner submitted the IHT forms for her mother's estate she received a letter from HMRC asking her to tell them if any values changed.  Obviously, HMRC were looking for increases so they could recalculate any IHT owed.

Is this letter not sent out anymore?  Even if it is not, I can't see why you can't let HMRC know the IHT values need to change.

shiraz99

p00hsticks said:

I may be wrong, but I thought that I'd read somewhere that when the probate process was changed at the beginning of the year, they introduced an option within the application that allowed you to select for the actual sale price of a property to be used retrospectively if it was sold within a certain timeframe ?

I haven't seen that option when I applied this year.

Secret2ndAccount

If you fill out IHT405 - in other words if there is likely to be IHT to pay - then there is a box to tick to say you want to use the sale price as the valuation. Have to sell within 12 months. Of course this is in HMRC's interest in many cases as a higher sale price means more IHT. That's 40% IHT instead of potential CGT which comes with an exempt allowance and a lower rate.
I have not seen such a box for houses below IHT threshold.

p00hsticks

Secret2ndAccount said:

If you fill out IHT405 - in other words if there is likely to be IHT to pay - then there is a box to tick to say you want to use the sale price as the valuation. Have to sell within 12 months. Of course this is in HMRC's interest in many cases as a higher sale price means more IHT. That's 40% IHT instead of potential CGT which comes with an exempt allowance and a lower rate.
I have not seen such a box for houses below IHT threshold.

Thanks - that must be what I was thinking of.

getmore4less

wicksee said:

Question:
Is there a way to retrospectively alter the Probate valuation to a more accurate figure, or to declare a lower capital gain when the property is sold, based on an incorrect Probate valuation?
Obviously these values are well within the IHT threshold, this is purely about CGT. Unequivocally i am not trying to defraud the tax man.
I believe it's unreasonable to conclude that the house has inflated in price by £50,000 within the space of 6 months.

Get the CGT forms and read through those.
As the values has not been ascertained you can use alternative values on the return which may or may not get accepted.

I think you can ask in advance for HMRC to have a look at a CGT situation.

One for the tax board 

wicksee

OK, thank you all for your suggestions and apologies to the OP for hijacking their thread.
Just thought you'd like to know what happens when you undervalue for Probate :-)

NokSuCow

wicksee said:

OK, thank you all for your suggestions and apologies to the OP for hijacking their thread.
Just thought you'd like to know what happens when you undervalue for Probate :-)

No worries and good luck.