IHT property valuation - sale within 12 months

Strasbourg1955

Advice needed about question 12F on Form IHT405.  I've got a professional valuation of the house as at the date of death (April 2024).  That obviously goes in Box 8G. The house is going on the market shortly, and estate agents are suggesting we won't get that price. Question 12F says, if you are selling the house within 12 months (hopefully yes), do you want to use the sale price as the value at the date of death?  What are the implications of this question? The IHT needs to be paid by October, so I need to get the forms submitted to HMRC very soon and won't know the sale price. Is the purpose just to flag up that I might subsequently claim a refund of IHT because the house sold for less than the valuation? 

Mothman

On my Mother's property we used the professional valuation at time of death, paid the inheritance tax due and then claimed a refund once the property sale had completed at the fallen price. Claiming the refund was fairly painless (just one form) and the refund came through in a few weeks.

Mothman

I should also add that they also paid interest on the refunded amount.

Strasbourg1955

Following this up, I just spoke to the IHT Helpline at HMRC.  They said you can leave Q12 blank but if you complete it, you have to think carefully about 12F.  If you say yes and the house sells for more than the valuation price within 12 months, you have to pay 40% IHT on the difference instead of 28% CGT!  But if it sells for less, you can anyway claim a refund of IHT if the property sells within 4 years of death.  They didn't say so in so many words, but it sounds like Question 12F is a trap or at least a risk if you haven't put the house on the market yet. Another good tip they gave me is to take an average of 3 valuations and they don't all have to be full valuation reports, they can include Zoopla type data and estate agents.