Valuation of property 25 October 2022 at 5:29PM in Deaths, funerals & probate 7 replies 295 views

CasparDel

My aunt recently passed away and I am in the process of getting valuations on her house for probate.

Is inheritance tax paid on the valuation to gain probate or on the price a house is finally sold at?

How do I ensure I do not pay too much or little inheritance tax as house prices fluctuate?

I understand that some estate agents will give a high estimate to gain business.  This may not be achieved on the open market.

Thank you for all your help

p00hsticks

Is the estate likely to be subject to IHT ?

If it is, then I think there might be an option to go back and use the price the property actually sells for, privding it is sold within (i Think) 12 months of probate being granted. 

Savvy_Sue

IHT is paid on the value at the time of death. If you're anywhere near or into IHT territory then it could well be worthwhile to get a probate valuation from a RICS surveyor, rather than a 'best of 3' estate agents. There may be a charge for this, which is a valid cost to the estate, but the one we found said he did not charge for probate valuations because it didn't seem right. 

Then, if the property sells for a lot more than the probate valuation, there MAY be Capital Gains Tax to pay on the difference. 

Keep_pedalling

If the estate is going to fall into IHT territory then it is best to pay for an accurate RICS valuation that HMRC are unlikely to challenge later.

If the estate is below her available nil rate band £325k ( or up to £650k if she was a widow) then it is fine to get several EA valuations and use the highest one. I say the highest one as that reduces the risk of being hit with capital gains tax when it is eventually sold.

shiraz99

CasparDel said:

My aunt recently passed away and I am in the process of getting valuations on her house for probate.

Is inheritance tax paid on the valuation to gain probate or on the price a house is finally sold at?

How do I ensure I do not pay too much or little inheritance tax as house prices fluctuate?

I understand that some estate agents will give a high estimate to gain business.  This may not be achieved on the open market.

Thank you for all your help

IHT is payable on the value of the estate at the time of death not when the property is sold. As above if the current value is under the IHT thresholds then it's worth taking the higher value to negate future CGT liabilities.

Huynha

I searched for an article from the government site that might be useful for you.
https://www.agbudget.co.uk/product/on-site-pool-lining-system/

Huynha

Sorry, wrong link. Here's the link I meant to send
https://www.gov.uk/inheritance-tax

shiraz99

Huynha said:

Sorry, wrong link. Here's the link I meant to send
https://www.gov.uk/inheritance-tax

You could've edited your original post, as per the message at the top of the page.