Probate Property Valuation and CGT

shimmerinlights
Forumite Posts: 18
Forumite

Hi,
I wonder if anyone could help with my understanding of the relationship between IHT and CGT:
If the probate valuation of a property falls below the IHT threshold of £500,00 (one person’s allowance), and for example is £400,000, but is then sold a year later for £500,00, is Capital Gains Tax due on the £100,000 extra? Or, because the increased value still didn’t exceed the £500,000 IHT threshold, does the increased value still benefit from the IHT threshold as it still didn’t exceed £500,000?
Many thanks.
0
Comments
-
CGT will apply which is why you should not undervalue property when you are well under the IHT exemptions and if anything go in on the high side. Under current market conditions I would thing a 25% gain in one year unlikely.1
-
Thanks Keep Pedalling. I suspected that might be the case.0
-
or you could just submit a 'correction of probate' form and not pay any cgt
https://www.financialadvice.net/what_happens_when_property_sells_for_more_than_probate_valuation/video/1969/18
https://www.gov.uk/government/publications/inheritance-tax-corrective-account-c4
0 -
Re the previous post that km1500 has kindly posted. Would appreciate some clarification if possible please? I have a very similar situation to that mentioned previously; namely the probate valuation was probably too low- with a very good offer being subsequently made for the estate. In short, if I had waited another month before submitting the application, I would have put a higher figure. Advice so far, on an HMRC forum, is that the probate valuation should be amended BEFORE the CGT return is submitted. But how is this actually done? The C4 form in the link mentions IHT 400. IHT is not an issue in my case as it is below the threshold- so no need to complete a 400. The other factor in this is that I do not want to inject anymore delay to the Probate application process, as it is bad enough as it is already. Any advice you can give would be greatly appreciated.0
-
tigermark119 said:Re the previous post that km1500 has kindly posted. Would appreciate some clarification if possible please? I have a very similar situation to that mentioned previously; namely the probate valuation was probably too low- with a very good offer being subsequently made for the estate. In short, if I had waited another month before submitting the application, I would have put a higher figure. Advice so far, on an HMRC forum, is that the probate valuation should be amended BEFORE the CGT return is submitted. But how is this actually done? The C4 form in the link mentions IHT 400. IHT is not an issue in my case as it is below the threshold- so no need to complete a 400. The other factor in this is that I do not want to inject anymore delay to the Probate application process, as it is bad enough as it is already. Any advice you can give would be greatly appreciated.
https://www.accountingweb.co.uk/any-answers/increasing-iht-value-of-property-to-save-cgt
https://www.step.org/industry-news/executors-cannot-claim-property-sales-above-probate-value
In your case it may be possible to alter the valuation if confirmation is still not complete but I have no idea on how you do that.0 -
Thank you, much appreciated.0
Categories
- All Categories
- 338.8K Banking & Borrowing
- 248.6K Reduce Debt & Boost Income
- 447.6K Spending & Discounts
- 230.7K Work, Benefits & Business
- 600.9K Mortgages, Homes & Bills
- 171.1K Life & Family
- 244K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards