Probate value for property

ahfat41

Had two EA valuations, first one between £350,000 - £375,000. Second one guide price of £350,000. Shall I put £350,000 or £360,000? Was going to have a third one but been put off by one not turning up.The probate value came to £76,000+ Thanks

Keep_pedalling

Is there a zero missing from that probate value? Unless it puts the estate in IHT territory I would go with the highest valuation to minimise the risk of a CGT liability when it is sold.

ahfat41

Oops probate value was £176,000. Thanks

ahfat41

About  CGT, how will that affect on firet  death, he died in December 2024 probate value £176,000 say for example I died 5 yrs later, the house is now worth £450,000, 50% each. Surely CGT should be based on valuation of second death. Am I missing something or confused? Thanks

Keep_pedalling

ahfat41 said:

About  CGT, how will that affect on firet  death, he died in December 2024 probate value £176,000 say for example I died 5 yrs later, the house is now worth £450,000, 50% each. Surely CGT should be based on valuation of second death. Am I missing something or confused? Thanks

Sorry, I forgot about your other thread and that you are the surviving spouse, in which case CGT does not come in to it as it is your primary residence and is exempt for CGt.

ahfat41

But it will pass to the children on my death, so there is likely be CGT? It is also an immediate post death trust. Am so confused.

Keep_pedalling

ahfat41 said:

But it will pass to the children on my death, so there is likely be CGT? It is also an immediate post death trust. Am so confused.

No, although the trust is the legal owner of his share of the house you are the beneficial owner, so it is still covered by spousal exemption and forms part of your estate for IHT purposes and the whole house is covered by primary residence exemption for CGT.

ahfat41

On my death will the whole house considered as part of my estate for IHT purposes e.g £450,000 not £225,000 his share. What I meant will the whole house value be declared as in a trust. Thanks

Keep_pedalling

ahfat41 said:

On my death will the whole house considered as part of my estate for IHT purposes e.g £450,000 not £225,000 his share. What I meant will the whole house value be declared as in a trust. Thanks

IHT is based on beneficial ownership. Legal ownership is split between you and the trust but you have full beneficial ownership. This means spousal exemption still applies so although for IHT purposes the whole house falls as part of your estate, the the trust has not used any of his NRB or residential NRB so they are available to your estate. Primary residence relief also applies to CGT so there won’t be any payable by the trust. 

ahfat41

He gave £42,000 to his son, won’t that be deducted from his NRB. Do I understand on my death when the children inherited the house and decided to sell it there will not be capital gain to pay. Thanks

Keep_pedalling

ahfat41 said:

He gave £42,000 to his son, won’t that be deducted from his NRB. Do I understand on my death when the children inherited the house and decided to sell it there will not be capital gain to pay. Thanks

Yes, it will reduce the transferable NRB and there will be no CGT on any gain between the two deaths.