IHT400 "provisional estimates" ?

rolysatch

Hi

I'm just finishing iht400 and all the associated forms. At the declaration stage it says "The value of items in the boxes listed are provisional estimates which are based on all the information available to me/us at this time."

I've put a value down for the house based on estate agents. Would that be considered a provisional estimate? I'm assuming as they will (hopefully) use that to calculate IHT it wouldn't be considered provisional but unsure and wanted to check?

Also, when they ask about professional property valuation they are talking RICS and not estate agent?

Any advice appreciated.

Thanks in advance

Hoenir

A RICS valuation and full report may well make your life easier with the District Valuer.  

rolysatch

Hoenir said:

A RICS valuation and full report may well make your life easier with the District Valuer.  

hi, with NRB, RNRB and inherited NRB i'm well over 100k below any inheritance tax so didn't think it would be required. i also have a inherited RNRB that i could have used but didn't need to. i was bit concerned that a RICS survey might come in with a ridiculously low figure and i would be hit with capital gains tax. the estate agent estimates seem realistic comparing to neighbouring properties

IreneMot

I would also recommend a RICS only because HMRC might make you do it later, this then can slow down the process. The surveyor who we used asked us the price we had it valued at by the estate agent. When he did his report, he then put it 5k over that price. Not saying that will happen, but useful to know. 

Keep_pedalling

As you are will within the IHT exemptions the chances of getting a challenge fro HMRC. Personally in these circumstances I would go with the highest EA valuation to minimise a CGT liability.

SnowMan

I was in a similar position to you rolysatch. These are my thoughts based on just my own experience.

I had to fill in the full IHT400 four weeks ago but haven't heard back from HMRC at all. There is no inheritance tax payable, and the house value was not relevant in the sense that the property valuation (however optimistic) could never conceivably push the estate value close to inheritance tax territory. The house was already up for sale, so I put down the asking price and explained in the notes that the property was for sale and we were expecting to achieve the asking price which was the value given, albeit there has been no offer yet.

I couldn't find anything in the notes to clarify what 'professional valuation' meant either so I ticked no as we didn't go the RICS route, it was essentially an estate agent valuation. The danger of getting an RICS valuation would be that it came in at under the asking price and that would cause CGT issues (without any IHT benefits), and taking this approach in any case saved on the time/cost element of that. If you do tick yes the form asks you to send in a copy of the professional valuation.

I don't consider the estimate to be provisional. It may be subjective in the sense that two valuers might come up with a different valuation, but to my mind it's a final figure as I have no intention to revise it or see any possibility to revise it upwards, and so is not provisional.

I took the view that HMRC would probably not question the valuation as they could see that it wasn't going to net them any inheritance tax, and I suspected they would be less interested in the CGT implications. Had we been in an inheritance tax to pay scenario I would have got an RICS valuation.

rolysatch

IreneMot said:

I would also recommend a RICS only because HMRC might make you do it later, this then can slow down the process. The surveyor who we used asked us the price we had it valued at by the estate agent. When he did his report, he then put it 5k over that price. Not saying that will happen, but useful to know. 

That's interesting, i figured the rics would potentially pick up more issues than the quick look round of the estate agent and out in a significantly lower value. thanks for your input.

rolysatch

Keep_pedalling said:

As you are will within the IHT exemptions the chances of getting a challenge fro HMRC. Personally in these circumstances I would go with the highest EA valuation to minimise a CGT liability.

Yes that was my thinking too. If they do challenge, then the delay will be a bit of a pain, but not the end of the world. Thanks!

rolysatch

SnowMan said:

I was in a similar position to you rolysatch. These are my thoughts based on just my own experience.

I had to fill in the full IHT400 four weeks ago but haven't heard back from HMRC at all. There is no inheritance tax payable, and the house value was not relevant in the sense that the property valuation (however optimistic) could never conceivably push the estate value close to inheritance tax territory. The house was already up for sale, so I put down the asking price and explained in the notes that the property was for sale and we were expecting to achieve the asking price which was the value given, albeit there has been no offer yet.

I couldn't find anything in the notes to clarify what 'professional valuation' meant either so I ticked no as we didn't go the RICS route, it was essentially an estate agent valuation. The danger of getting an RICS valuation would be that it came in at under the asking price and that would cause CGT issues (without any IHT benefits), and taking this approach in any case saved on the time/cost element of that. If you do tick yes the form asks you to send in a copy of the professional valuation.

I don't consider the estimate to be provisional. It may be subjective in the sense that two valuers might come up with a different valuation, but to my mind it's a final figure as I have no intention to revise it or see any possibility to revise it upwards, and so is not provisional.

I took the view that HMRC would probably not question the valuation as they could see that it wasn't going to net them any inheritance tax, and I suspected they would be less interested in the CGT implications. Had we been in an inheritance tax to pay scenario I would have got an RICS valuation.

Hi thanks for the response, yes you're in exactly the same position as me, and I think I will take the risk and go with that approach. There's no IHT payable whatever happens, but I don't want to risk a surveyor with a very sharp pencil finding every issue and valuing it much lower than we'll likely sell for. The only risk is a delay if they challenge it, but I'm prepared to take that risk. Thanks again