House sells for more than probate valuation.

Bella2727

I put the value down after a chartered surveyor valuation as 400k at date of death. One year on probate is granted and I want to sell. The property is a commercial block of flats and in order to sell i have spent about 50k plus on it. The rents have all gone up. The value is now 500-550k. As it is only a year since date of death, and I am ready to put on the market, how will this affect my IHT and CGT. Is there a cut off of years when HMRC won't be interested in and go after more IHT and I'll just have to declare for CGT? Thanks

uknick

I'm assuming the property is still in the estate and hasn't been transferred to a beneficiary.

You need to work out the most tax efficient tax to pay, i.e. the least.  If it is IHT you ask to restate the IHT return.  If it is CGT, don't touch the IHT side of things, have the estate pay CGT.

However, there may be an issue with the CGT approach.  Strictly speaking, HMRC don't consider an estate valuation finalised until they have used their own valuers to confirm the value.  The property may be flagged up when it is sold for more than probate value and HMRC may take a closer look.  Unlikely but possible.    

If decide to go the CGT route, the £50k of costs, did they come from the estate or somewhere else such as a beneficiary?

Keep_pedalling

Have you offset the money spent on the property against the rental income? You can’t do that and use to reduce CGT.