IHT405 Question 11F

TcpnT

I've come across a few posts on this subject but I still can't work out whether to fill in this box and if I do what effect it might have.

Estate is around £900k with full £1M IHT allowance available - so no IHT to pay. The house is valued at around £575k and will be put on the market as soon as probate is granted.

I have entered "will be sold later" for Q11B and I have left C,D and E blank but I'm struggling with 11F "Do you want to use the sale price as the value at the date of death".

The first question is whether it is even allowable to answer yes if the house has not yet been sold? Or can the answer be yes and apply to a future sale price not yet achieved?

Secondly if you did answer yes in this situation how would HMRC know about the price eventually received and if they did know how would they use it.

Thirdly if there is no IHT payable is the question even relevant?

Fourthly if you answer yes and the sale price is above the date of death valuation declared earlier in the form does this avoid CGT becoming payable on the difference.

Thanks

RAS

If the sale price is above the date of death valuation, after fees are paid, then the estate is liable for CGT on the uplift, less any allowance.

With £100k capacity, pick the up end quote from the EAs to reduce the risk.

TcpnT

Thanks your reply. I am aware of that and that is what I will be doing.

However my original question still stands about the significance and exact use of box 11F

Keep_pedalling

Yes you can do this, it avoids any chance of generating a CGT liability. In the vast majority of cases the home will not be on the market as the executors will not have probate at this stage.

You only need to report the sale value if it actually impacts IHT which is unlikely in this case. HMRC have visibility of the sale price of uk properties.

pcgtron

I would say always put no on that question. CGT is at a lesser rate than Iht so if the house does sell for more surely it's better to pay the CGT on the difference rather than the whole lot at 40%

Notepad_Phil

https://forums.moneysavingexpert.com/discussion/comment/82045034#Comment_82045034

But if there's very little likelihood of any IHT having to be paid (which seems likely in this case) and the house does go for more than the valuation then if you put 'no' then you could end up having to pay CGT on the uplift, minus the allowance.

TcpnT

https://forums.moneysavingexpert.com/discussion/comment/82045034#Comment_82045034

But as notepad says above there is going to be no IHT payable here under any circumstances. So my concern is to do whatever I can to avoid a CGT charge becoming payable. However I don't want to value the house excessively as this could be seen as a deliberate move to avoid CGT if the market rose significantly before the sale date (which seems unlikely). I feel that the value at date of death needs to be stated as high as possible but still within the realms of reality