Probate House Value versus Estate Agent Market Price

pcgtron

Hi all.

Probate has now been granted on the estate I am the executor for, so I'm now in the process of selling the properties.

I had professional RICS valuations done on both properties that need to be sold, but we had an estate agent round (Known to the family) and wants to market one of the houses for £175K more than the probate valuation we got, and insists that we'll get it (Very desirable village)

I have to agree with the estate agent that the house was undervalued by the RICS surveyor, but if I manage to sell the property for anything near the estate agent valuation, would HMRC come calling for more IHT? I feel I have done my due dilligence by getting a professional RICS valuation, but the difference between the RICS valuations and the estate agent one is very very different. I'm happy to pay captial gains tax on the difference, but it just seems miles apart.

Obviously happy to pay any tax due, but don't really want an investigation into the estate, as I feel I've done everything by the book, but this has thrown me. Any ideas as to what would happen if the house did sell for much much more than the RICS valuation

poseidon1

As far as HMRC is concerned you have done your due diligence as an executor in commissioning a RICS red book valuation ( considered the gold standard in such matters) and using that as your probate valuation. The vast majority of DIY executors settle for 'lesser' estate agent's valuations which in my opinion lay them far more likely to challenge , if IHT is at stake.

Suggest you proceed with your sale as advised and if fortunate to achieve a substantially higher sales figure, pay the 24% CGT thereon but don't overlook your additional obligation to submit an estate tax return form SA900 reporting the profit ( again). That formal tax return would give HMRC the opportunity to query the valuation if they wish, but if so it's the the surveyor's job to substantiate the basis for their opinion.

gplion55

As mentioned above, you will pay Capital Gains on any profit you have made above the Probate value. Look at what's happening in the market right now with prices up and down like a YoYo..but the agent will normally best know the local market. Just pay your CGT and smile.