House valuation when house sale will be needed to pay IHT

OlManRiver

Hi there,

I am executor for my father's estate and his house value means that the estate will be well above the level where IHT is due. However, until the house is sold, the estate will not have sufficient funds to pay for the IHT. I'm aware that the IHT can be paid in instalments over 10 years with the first payment falling due at the end of the 6th month after death, and then the remainder can be paid once the house is sold. I am in the process of contacting estate agents to start the sales process and also to try and obtain a value of the house for probate. I have also seen that some posts are recommending paying for a surveyor to give a probate valuation instead of using estate agents.

However, I'm wondering how important the valuation is right now? As I have to wait until the house is sold to pay IHT, is it likely that I get a final approval on the inheritance tax due before this time or will it have to wait until the sale is finished?

Many thanks for your help!

bobster2

For the purposes of IHT and also later possible Capital Gains Tax for the estate - it's the valuation on the date of death that's important. The final sale price doesn't give you that. A RICS-compliant valuation can be very helpful for establishing this value to the satifaction of HMRC.

Hoenir

The HMRC might well require any liquid funds available from the Estate prior to granting probate. While IHT is payable in installments. There's an interest charge to bear.