IHT30 HMRC having it both ways

bobster2

So you get probate, pay IHT and then some time later can seek an IHT30 clearance certificate to confirm that HMRC are happy with the amount of IHT you paid.

Overall this means they are happy that the estate (which may have included a property) was valued correctly at the date of death.

But they sneak in this cheeky line on the IHT30...

"This certificate does not set the value of individual items for any other HMRC purpose. For Capital Gains Tax purposes, this certificate does not mean that values have been "ascertained" or that they can be taken as market values."

Essentially it means for example - just because they've agreed with your IHT return which valued a house at £X on the date of death - they reserve the right to in fact declare that the value was lower on the date of death, when later the estate, or someone else, needs to sell the house and possible pay CGT.

Hoenir

Obtain a RICS valuation for probate purposes. Then there's less likelihood of HMRC querying. It's in the executors interests to pay CGT rather than IHT. HMRC are fully aware that this avenue maybe exploited by some who believe they've thought of something that's never been tried previously. 

bobster2

Hoenir said:

Obtain a RICS valuation for probate purposes. Then there's less likelihood of HMRC querying. It's in the executors interests to pay CGT rather than IHT. HMRC are fully aware that this avenue maybe exploited by some who believe they've thought of something that's never been tried previously. 

Yes - of course - a RICS valuation is very helpful for both IHT and CGT. And of course people undervaluing for IHT purposes (because they'd prefer to pay CGT) is something that HMRC need to look out for.

However, it's the reverse situation I was thinking about. This clause allows HMRC to later (after a house sale) decide that the house valuation on the date of death is lower for CGT purposes than it was for IHT purposes - so the estate (or beneficiaries who inherit the property) could in effect be double-taxed.