House valuation - Probate & inheritance tax

Snot

I'm dealing with an estate where the first spouse died 5 years ago and left everything to their partner, so I believe the estate has a £1m threshold. The value of the estate is ~ £640k, so there is plenty of headroom. But I'm struggling with the house valuation, and clearly want to avoid under valuing for IHT and then facing a CGT if it sells for more later.

Because there is so much headroom in can we just gave a generous valuation ?

Also form IHT405 asks if we intend to sell within 12 months of the date of death and do we want to use the sale price as the value at the date of death. So does this negate the need to give an accurate valuation, as the sale price will replace it ?

NorthYorkie

See IHTM23185 - Special valuation matters: land sold under a binding contract entered into after the death - HMRC internal manual - GOV.UK

Keep_pedalling

This is a bit of a difficult one because with an estate valued at £640k you only need the NRB plus transferable NRB and therefore do not need to do an IHT return.

if you pay safe and inflate the value of the property then you will have to use the residential NRB which requires a full IHT return. Have you had it valued yet?

Snot

No houses have sold on the road for 4 years, so basing on similar near by, but will look at getting a valuation from an Estate Agent or surveyor. I’ve already done a draft of the IHT paperwork specifically because it’s was close to the £650k. 

 NorthYorkie, Not sure I really follow what that link says, other than needing a reasonable valuation. But will read it again.   

Keep_pedalling

Snot said:

No houses have sold on the road for 4 years, so basing on similar near by, but will look at getting a valuation from an Estate Agent or surveyor. I’ve already done a draft of the IHT paperwork specifically because it’s was close to the £650k. 

 NorthYorkie, Not sure I really follow what that link says, other than needing a reasonable valuation. But will read it again.   

I would get 3 EAs to value it and go with the highest.