Deductions on Capital Gains When selling from Estate

WobagUK

We are selling a house from the estate of a deceased relative, and done quite well in overshooting the at-death valuation.

Capital Gains will therefore be due on all but 3,000 of the increase.  I know you can deduct other things from the taxable amount, but its a bit vague.You can deduct costs of buying, selling or improving your property from your gain.

These include: costs of improvement works, for example for an extension (normal maintenance costs, such as decorating, do not count)

How would you categorize the following as deductable or not given the above:

Locksmith: being able to gain entrance to the property
House Clearance:  it wouldnt have been saleable in the state it was in
Equipment deinstallation:  removal of medical equipment including stairlift.  Would have been obstructive to sale.

Keep_pedalling

None of those things can be deducted, just the selling costs.

Was the estate subject to IHT?

WobagUK

Keep_pedalling said:

None of those things can be deducted, just the selling costs.

Was the estate subject to IHT?

Nope no IHT

p00hsticks

WobagUK said:

Keep_pedalling said:

None of those things can be deducted, just the selling costs.

Was the estate subject to IHT?

Nope no IHT

in that case, rather than having.....  WobagUK said:

done quite well in overshooting the at-death valuation

.....it's a shame that a higher (more realistic ?) value was not put on the property for probate purposes, thus avoiding any CGT liabilty. How was the probate valuation arrived at ? 

Linton

You can update the probate value within 2years of the death.

mybestattempt

Linton said:

You can update the probate value within 2years of the death.

I'm don't know your source for that but, for an amendment to only
the property market value at date of death, the HMRC Inheritance Tax Manual indicates 6 months from the date of discovering the original figure was incorrect:

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm10701

Also, while an increase in probate value would reduce CGT it could move the estate into IHT liability.

Linton

mybestattempt said:

Linton said:

You can update the probate value within 2years of the death.

I'm don't know your source for that but, for an amendment to only
the property market value at date of death, the HMRC Inheritance Tax Manual indicates 6 months from the date of discovering the original figure was incorrect:

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm10701

Also, while an increase in probate value would reduce CGT it could move the estate into IHT liability.

Source: https://community.hmrc.gov.uk/customerforums/cgt/77959b81-9a45-ee11-a81c-6045bd0b507d#:~:text=You%20can%20amend%20a%20probate,the%20Capital%20Gains%20Tax%20return.

yes, it could bring the estate into IHT. Whether it does and the money involved of course depends on the numbers.

WobagUK

p00hsticks said:

WobagUK said:

Keep_pedalling said:

None of those things can be deducted, just the selling costs.

Was the estate subject to IHT?

Nope no IHT

in that case, rather than having.....  WobagUK said:

done quite well in overshooting the at-death valuation

.....it's a shame that a higher (more realistic ?) value was not put on the property for probate purposes, thus avoiding any CGT liabilty. How was the probate valuation arrived at ? 

Average of three independent Estate Agent valuations.  To be fair the selling agent was pretty shocked at the selling price we got, so I dont think the valuations were unrealistic. 

Keep_pedalling

WobagUK said:

p00hsticks said:

WobagUK said:

Keep_pedalling said:

None of those things can be deducted, just the selling costs.

Was the estate subject to IHT?

Nope no IHT

in that case, rather than having.....  WobagUK said:

done quite well in overshooting the at-death valuation

.....it's a shame that a higher (more realistic ?) value was not put on the property for probate purposes, thus avoiding any CGT liabilty. How was the probate valuation arrived at ? 

Average of three independent Estate Agent valuations.  To be fair the selling agent was pretty shocked at the selling price we got, so I dont think the valuations were unrealistic. 

When there is no danger of IHT coming into the picture best advice is always use the the highest valuation.

WobagUK

Keep_pedalling said:

When there is no danger of IHT coming into the picture best advice is always use the the highest valuation.

As it was a solicitor prepared application we didnt get to choose what value they put on it.

WobagUK

Oh additionally, do you have to submit proof of deductions against CGT on a simple estate or can you just state what the costs were?