Property valuation type required for probate

RnK136

My Dad died end of July and my brother and I have the property to sell.

Must we get an RICS valuation done for probate? or will an estate agents valuation suffice? or maybe an average of 2-3 estate agents?

Flugelhorn

I just estimated from  a couple of recent sales on the same road - I seem to remember that if you are well adrift of any IHT thresholds then you don't need anything more formal. I put £230K for the property and got £226K when I sold it 

RnK136

Flugelhorn said:

I just estimated from  a couple of recent sales on the same road - I seem to remember that if you are well adrift of any IHT thresholds then you don't need anything more formal. I put £230K for the property and got £226K when I sold it 

That might be the issue I have. Next door was up for sale last year at £500k, but my Dad's house is in terrible condition in comparison to theirs and that would definitely be factored into what we sell it for.

But isn't the IHT threshold upped to £500k if you leave property to your children? In that case, we'd be ok.

Flugelhorn

actually if your parents were married then I think your mother's allowance is added in so it is even higher than 500

RnK136

Flugelhorn said:

actually if your parents were married then I think your mother's allowance is added in so it is even higher than 500

Yes, they were and I'd forgotten about that. There was some allowance leftover from her too.

p00hsticks

It's not just IHT you need to consider. If you underestimate the value for probate and it then sells for more, the estate will potentially be liable for Capital Gains Tax on the increase between the declared value for probate and the selling price (less selling costs)

RnK136

p00hsticks said:

It's not just IHT you need to consider. If you underestimate the value for probate and it then sells for more, the estate will potentially be liable for Capital Gains Tax on the increase between the declared value for probate and the selling price (less selling costs)

But it is ok to just use estate agents valuation/s? Not legally required to get an RICS one done? Albeit, estate agents may be lower, I don't know.

Keep_pedalling

I would get 3 valuations and go with the highest +5% to avoid a CGT liability. 

Flugelhorn

not you are not legally required to get RCIS valuation

Sarahspangles

The RICS estimate is definitely the correct one if you think you’re close to IHT thresholds. If you aren’t, you still need a realistic valuation from estate agents because if it’s undervalued you would pay CGT on the gain during the period before sale.

warrenb

Keep_pedalling said:

I would get 3 valuations and go with the highest +5% to avoid a CGT liability. 

This is exactly what I did. Takes CGT out of the equation