Inheritance Tax-Property estimations of 3 agents in a simple mail sufficient?

HuggieC

Do I need to get a costly chartered surveyor, or will it be sufficient to have 3 agents market estimates for a flat of around 200.000? Does it matter how huge the rest of the estate is for answering this? The real estate agents send me mailings after their visits with their market price estimation within the mail but not much more details. Some send it with a brochure with comparable flats being sold in that region, but without information when they were sold. Would that be enough for HMCR? Thanks a lot!

Voyager2002

My experience was eight years ago... we needed to provide an estimate of the value of a flat on the date of death, and did so using published information from Zoopla. HMRC referred the question to the District Valuers' Office, and following a conversation we agreed a figure that was slightly higher than our original estimate.

There was no need for so much as one estate agent, never mind an expensive Valuer.

Bookworm105

as shown on the post above, at the end of the day the Valuation Office Agency ("district valuer") is the dept of HMRC whose word is final

by submitting your own value you are asking the VOA to either accept or reject it. If they reject it then the quality of the value you offered comes into play. if done from internet sources it has low value, if done by a qualified valuer it has higher value, byt the VOA could still reject it. If you decide to argue with VOA and thus end up in a tribunal, then you will need to have a professional valuer's report for your case to have any credibility.

If you want to save money then do as you say and see what happens.
The average of 3 should be fine, especially if they have valued with a view to selling rather than for probate purposes, as they will inflate the value to sell rather than deflate for probate. 

RAS

You haven't given us the total value of the estate and whether the deceased was single, married/civil partnership, widowed or divorced. Which affects the available IHT allowances. And also the likelihood that the valuation will be subject to scrutiny.

FreeBear

Voyager2002 said:

My experience was eight years ago... we needed to provide an estimate of the value of a flat on the date of death, and did so using published information from Zoopla. HMRC referred the question to the District Valuers' Office, and following a conversation we agreed a figure that was slightly higher than our original estimate.

There was no need for so much as one estate agent, never mind an expensive Valuer.

I just looked at recent sold prices for similar properties in my immediate area. Took an average, then subtracted ~£20K to take in to account the condition. As the total value of the estate was well under the IHT threshold, didn't get asked any questions. If we had been close to the IHT threshold, would have probably paid for a proper RICS valuation.

pjs493

This is what I did when my husband died in order to value a rental property in his sole name for Probate. It was an excepted estate and I am the sole beneficiary which made everything quite straightforward. 

Depending on the value of the estate in question and the complexity of it will depend on what is best in your situation. I’m assuming that IHT will be due because you’ve mentioned HMRC so it’s already more complex than my situation. 

Keep_pedalling

If the total estate is well below the available IHT exemptions then use the highest EA valuation to minimise the risk of a CGT liability. If close to or over those thresholds get a paid for RICS valuation. 

Bigphil1474

When I did my dads probate stuff, we just guestimated the value of the house based on what an EA friend of a friend said the houses like his were going for in the area. We actually sold it a year later for just under £5k less than that value. My dads estate came in well under the threshold (for someone passing their property to children), so wasn't a huge factor. 

Keep_pedalling

Bigphil1474 said:

When I did my dad’s probate stuff, we just guestimated the value of the house based on what an EA friend of a friend said the houses like his were going for in the area. We actually sold it a year later for just under £5k less than that value. My dad’s estate came in well under the threshold (for someone passing their property to children), so wasn't a huge factor. 

The problem with doing that is that when you face no possibility of IHT is that if it had sold for more than the guesstimate you would have been faced with a CGT liability. Under that situation I would always go high on the valuation.

Bigphil1474

No we wouldn't. In simple terms, the information provided as part of the probate process was to confirm there was no IHT to pay. I can't remember the exact details, but it doesn't require a line by line entry of all assets, just an overall figure for cash and assets in the estate. It would be impossible for HMRC to ascertain the value of the property from the probate information, and to determine whether any CGT was liable. In any case, we would have made sure there was no CGT liability had it been an issue. The property was sold by the executors as part of the estate and there was no requirement to even report the sale of the property.

FreeBear

Bigphil1474 said: It would be impossible for HMRC to ascertain the value of the property from the probate information, and to determine whether any CGT was liable.

HMRC would be able to see what the value/sale price was from the Land Registry information.