House valuation for IHT/Confirmation but with possible CGT implications

jem16

Dad passed away last month and my brother and I will be selling his house once Confirmation has been granted. As well as Executors of dad's estate, we also own half the house which was left to us as part of a Liferent Trust when Mum died last March.

We are just trying to consider the best way to get a valuation done for the house. There will be no IHT involved as Dad's estate will be below the threshold once he uses Mum's NRB. Last April there was a desktop valuation done which sufficed but wondering what to do this time around with respect to trying to avoid CGT for both of us.

The lawyer who is handling the estate has suggested that we can either do the desktop valuation again or get it done by a surveyor so it's perhaps more accurate but obviously a much higher cost there. A Home Report will be done but we don't want to get it done too early in case it needs refreshed depending on how long the Confirmation takes.

I've spoken to some estate agents and made appointments with three of them with a view to using one of them to sell the house in due course. They've mentioned that they can provide a free valuation for IHT/Confirmation purposes which would be based on market value.

Is it just as sensible to use those valuations as no-one can really tell what a house will actually sell for?

Savvy_Sue

CGT will only be an issue if the house increases in value significantly between date of death (as declared for probate / confirmation) and sale. Are you close to IHT being due? If you are, the paid for valuation can be useful in case HMRC want to argue about a low value.

jem16

Savvy_Sue said:

CGT will only be an issue if the house increases in value significantly between date of death (as declared for probate / confirmation) and sale. Are you close to IHT being due? If you are, the paid for valuation can be useful in case HMRC want to argue about a low value.

Once my Mum’s unused NRB is applied plus the RNRBs we are nowhere near IHT being due.

The only parts of Mum’s estate that wasn’t passed to Dad were two small legacies amounting to £4k along with her half share of the house which was held in the Liferent Trust giving my Dad the full benefit until his death. 

I know we deduct the £4k from her NRB but I’m not sure how the half of the house held in the Trust works with respect to both her unused NRB and RNRB. Even so I don’t think we are anywhere near to IHT being due.

Keep_pedalling

jem16 said:

Savvy_Sue said:

CGT will only be an issue if the house increases in value significantly between date of death (as declared for probate / confirmation) and sale. Are you close to IHT being due? If you are, the paid for valuation can be useful in case HMRC want to argue about a low value.

Once my Mum’s unused NRB is applied plus the RNRBs we are nowhere near IHT being due.

The only parts of Mum’s estate that wasn’t passed to Dad were two small legacies amounting to £4k along with her half share of the house which was held in the Liferent Trust giving my Dad the full benefit until his death. 

I know we deduct the £4k from her NRB but I’m not sure how the half of the house held in the Trust works with respect to both her unused NRB and RNRB. Even so I don’t think we are anywhere near to IHT being due.

Presumably your mother’s will gave you father a life interest in her share of the home which would have created an immediate post death interest trust. If that is the case then this would be covered by spousal exemption, so would not use any of her NRBs. As beneficial owner of the whole house all of it falls into his estate for IHT purposes.

jem16

Keep_pedalling said:

jem16 said:

Savvy_Sue said:

CGT will only be an issue if the house increases in value significantly between date of death (as declared for probate / confirmation) and sale. Are you close to IHT being due? If you are, the paid for valuation can be useful in case HMRC want to argue about a low value.

Once my Mum’s unused NRB is applied plus the RNRBs we are nowhere near IHT being due.

The only parts of Mum’s estate that wasn’t passed to Dad were two small legacies amounting to £4k along with her half share of the house which was held in the Liferent Trust giving my Dad the full benefit until his death. 

I know we deduct the £4k from her NRB but I’m not sure how the half of the house held in the Trust works with respect to both her unused NRB and RNRB. Even so I don’t think we are anywhere near to IHT being due.

Presumably your mother’s will gave you father a life interest in her share of the home which would have created an immediate post death interest trust. If that is the case then this would be covered by spousal exemption, so would not use any of her NRBs. As beneficial owner of the whole house all of it falls into his estate for IHT purposes.

Thanks. So basically for IHT purposes and a house likely to be valued around the £200k mark, my Dad has £850k minus the £4k legacies used by Mum? He's well within that even accounting for the whole house falling into the estate for IHT purposes.