House sells for more than probate valuation?

Robin77Wren

Hi. Hopefully a straightforward question that I can't find the answer to here so far.  What happens if my mother's house (father has already died) sells for more than the probate valuation?  In the process of preparing to apply for probate, there will be no IHT to pay.  Thanks in advance.

Keep_pedalling

The estate would ave a capital gains tax liability, so where an estate is well under IHT territory it is best to value on the high side.

NorthYorkie

As you have not yet applied for probate, there is no 'probate value'. If you were to value the house at the highest likely sale price and if the estate would still be below the IHT threshold, then you could use that figure in the probate application.

Should the house be sold for more than that figure, then a capital gain could arise. Bear in mind, however, that the figure used for probate (or even IHT if applicable) is not necessarily binding for Capital Gains Tax purposes. Strictly, the value must have been 'ascertained' for IHT in order to be binding for CGT - see CG16251 - Assets: checking valuations: value ascertained for probate - HMRC internal manual - GOV.UK In your case the value will not have been 'ascertained' because you are dealing with an excepted estate, so the Revenue may require the market value to be determined at the date of death.