Probate Value

karen110267

So I did probate myself and guessed as the value of the house, when probate came through I got the estate agent and put the house up for sale at more than the probate value, I just had an offer which is £20,000 more that the probate value but lower than the estate agents valuation. Can I change the probate value due to my error? it only came through on 25/07/2024 so not long ago and I’m worried that I will have to pay capital gains tax now. 

p00hsticks

Was the estate subject to IHT ?
I think you may be able to retrospectively correct it if so, although that means there would be more IHT to pay.
If not, then there will be a CGT liability on the sale. 
( Don't forget that you can deduct the selling costs and that the estate also has it;s own CGT allowance)

Keep_pedalling

According to this thread on the HMRC customer forum you can as long as it is within 2 years of the death.

https://community.hmrc.gov.uk/customerforums/cgt/77959b81-9a45-ee11-a81c-6045bd0b507d

I would in the first instance try to call HMRC explain the situation and ask for advice on how to proceed. 

karen110267

Not subject to IHT, I was hoping I could get it changed. 

mybestattempt

Keep_pedalling said:

According to this thread on the HMRC customer forum you can as long as it is within 2 years of the death.

https://community.hmrc.gov.uk/customerforums/cgt/77959b81-9a45-ee11-a81c-6045bd0b507d

I would in the first instance try to call HMRC explain the situation and ask for advice on how to proceed. 

I have commented a few times about that thread on the HMRC Community Forum as it is not correct.

The terms and conditions of that forum clearly say the answers are no substitute for HMRC official guidance or legislation.


This what the official guidance says about date of death (probate) valuations for an interest in land (which means land and buildings on it ) for excepted estates:

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm33026

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm06033

Keep_pedalling

mybestattempt said:

Keep_pedalling said:

According to this thread on the HMRC customer forum you can as long as it is within 2 years of the death.

https://community.hmrc.gov.uk/customerforums/cgt/77959b81-9a45-ee11-a81c-6045bd0b507d

I would in the first instance try to call HMRC explain the situation and ask for advice on how to proceed. 

I have commented a few times about that thread on the HMRC Community Forum as it is not correct.

The terms and conditions of that forum clearly say the answers are no substitute for HMRC official guidance or legislation.


This what the official guidance says about date of death (probate) valuations for an interest in land (which means land and buildings on it ) for excepted estates:

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm33026

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm06033

Thanks for that

The first link says that CGT should be based on the market value at the date of death. For probate the OP seems to have supplied a guesstimate value that was below the actual market value so there should be no CGT liability. Quite how they deal with this I don’t know. 

mybestattempt

Keep_pedalling said:

mybestattempt said:

Keep_pedalling said:

According to this thread on the HMRC customer forum you can as long as it is within 2 years of the death.

https://community.hmrc.gov.uk/customerforums/cgt/77959b81-9a45-ee11-a81c-6045bd0b507d

I would in the first instance try to call HMRC explain the situation and ask for advice on how to proceed. 

I have commented a few times about that thread on the HMRC Community Forum as it is not correct.

The terms and conditions of that forum clearly say the answers are no substitute for HMRC official guidance or legislation.


This what the official guidance says about date of death (probate) valuations for an interest in land (which means land and buildings on it ) for excepted estates:

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm33026

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm06033

Thanks for that

The first link says that CGT should be based on the market value at the date of death. For probate the OP seems to have supplied a guesstimate value that was below the actual market value so there should be no CGT liability. Quite how they deal with this I don’t know. 

I think it's important to remember that it's the value at date of death that's required for the probate application.

It's not the value at a later date when the property is put on the market which is possibly some months after the date of the death or sold for at an even later date.

It's not unusual for a property to increase in value after the date of death and thus a capital gain to arise when it is disposed of.

At the moment, in this case, the property is under offer for £20000 more than the declared date of death value but that may simply reflect the increase in value several months since the date of death.

This is the HMRC Capital Gains tax guidance which explains why a claim that the sale proceeds should equate to probate value, which has not been ascertained in the case of an excepted estate, may be seen as an attempt to avoid capital gains tax:

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg16251

Keep_pedalling

mybestattempt said:

Keep_pedalling said:

mybestattempt said:

Keep_pedalling said:

According to this thread on the HMRC customer forum you can as long as it is within 2 years of the death.

https://community.hmrc.gov.uk/customerforums/cgt/77959b81-9a45-ee11-a81c-6045bd0b507d

I would in the first instance try to call HMRC explain the situation and ask for advice on how to proceed. 

I have commented a few times about that thread on the HMRC Community Forum as it is not correct.

The terms and conditions of that forum clearly say the answers are no substitute for HMRC official guidance or legislation.


This what the official guidance says about date of death (probate) valuations for an interest in land (which means land and buildings on it ) for excepted estates:

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm33026

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm06033

Thanks for that

The first link says that CGT should be based on the market value at the date of death. For probate the OP seems to have supplied a guesstimate value that was below the actual market value so there should be no CGT liability. Quite how they deal with this I don’t know. 

I think it's important to remember that it's the value at date of death that's required for the probate application.

It's not the value at a later date when the property is put on the market which is possibly some months after the date of the death or sold for at an even later date.

It's not unusual for a property to increase in value after the date of death and thus a capital gain to arise when it is disposed of.

At the moment, in this case, the property is under offer for £20000 more than the declared date of death value but that may simply reflect the increase in value several months since the date of death.

This is the HMRC Capital Gains tax guidance which explains why a claim that the sale proceeds should equate to probate value, which has not been ascertained in the case of an excepted estate, may be seen as an attempt to avoid capital gains tax.

While that is all true the OP just guessed at a valuation so a true value at date of death was never obtained.

mybestattempt

Keep_pedalling said:

mybestattempt said:

Keep_pedalling said:

mybestattempt said:

Keep_pedalling said:

According to this thread on the HMRC customer forum you can as long as it is within 2 years of the death.

https://community.hmrc.gov.uk/customerforums/cgt/77959b81-9a45-ee11-a81c-6045bd0b507d

I would in the first instance try to call HMRC explain the situation and ask for advice on how to proceed. 

I have commented a few times about that thread on the HMRC Community Forum as it is not correct.

The terms and conditions of that forum clearly say the answers are no substitute for HMRC official guidance or legislation.


This what the official guidance says about date of death (probate) valuations for an interest in land (which means land and buildings on it ) for excepted estates:

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm33026

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm06033

Thanks for that

The first link says that CGT should be based on the market value at the date of death. For probate the OP seems to have supplied a guesstimate value that was below the actual market value so there should be no CGT liability. Quite how they deal with this I don’t know. 

I think it's important to remember that it's the value at date of death that's required for the probate application.

It's not the value at a later date when the property is put on the market which is possibly some months after the date of the death or sold for at an even later date.

It's not unusual for a property to increase in value after the date of death and thus a capital gain to arise when it is disposed of.

At the moment, in this case, the property is under offer for £20000 more than the declared date of death value but that may simply reflect the increase in value several months since the date of death.

This is the HMRC Capital Gains tax guidance which explains why a claim that the sale proceeds should equate to probate value, which has not been ascertained in the case of an excepted estate, may be seen as an attempt to avoid capital gains tax.

While that is all true the OP just guessed at a valuation so a true value at date of death was never obtained.

I would suggest that if, on reflection, the OP is certain their guess at the date of death valuation was incorrect, then given the potential capital gains tax liability, it may be prudent to obtain a formal date of death valuation.