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  • FIRST POST
    • RJF71
    • By RJF71 12th Feb 19, 9:39 AM
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    RJF71
    Help with District Valuer querying probate value of property
    • #1
    • 12th Feb 19, 9:39 AM
    Help with District Valuer querying probate value of property 12th Feb 19 at 9:39 AM
    HI

    i'm the executor of a will of a deceased family member (date of death 7 May 2016)

    I completed all forms, including relevant IHT forms as the estate was over the IHT threshold, paid for a probate valuation of the deceased's house by a RICS Sureyor, was granted probate, paid IHT on the liquid assets of the estate and opted to pay in instalments for the remainder due on the property.

    I was contacted by the District Valuer by phone in June 2018 as they had received instruction from HMRC to query the valuation. Several months and phone calls later they came to inspect the property in September 2018 and gave me their revised valuation late October 2018 which is £325,000 (£50k more than the Surveyor's valuation of £275k). This leaves the estate liable for more IHT.

    i have to agree or dispute the valuation and have been unsure what to do.

    The Valuer says they contacted the Surveyor to ask for their reasons for the valuation but have obviously chosen to disregard them. The District valuer (who by her own admission is not a building surveyor) said she had asked a colleague about costs to repair defects in the property (it is in poor condition) and had taken these into account. They had also used larger houses in a more desirable road as their basis for the valuation.

    Whilst tidying up the paperwork for the estate in January i came across a letter from HMRC from October 2017 stating they would not be making any more queries about any of the assets (with the usual caveats about giving false information etc).

    I spoke to the IHT helpline who said that i should raise it with the District Valuer but that they thought that if i'd had that sign off i should not have been contacted by the DV.

    The District Valuer said they would have to contact HMRC and make enquiries.

    I heard yesterday that HMRC still require the valuation from the DV and am now under pressure to agree to it or provide evidence as to why i disagree.

    i haven't seen any evidence of the enquiry to the DV about the valuation nor of their response to the DV about their enquiry following that letter. Everything has come by email or phone call apart from the valuation from the DV.

    Any advice appreciated - i don't know whether to just agree it or fight it, i don't know why they won't accept the RICS valuation, surely the Surveyor should be able to defend it ( he has been on sick leave from work so i haven't been able to speak to him).

    Many thanks
Page 1
    • Yorkshireman99
    • By Yorkshireman99 12th Feb 19, 11:38 AM
    • 5,046 Posts
    • 4,232 Thanks
    Yorkshireman99
    • #2
    • 12th Feb 19, 11:38 AM
    • #2
    • 12th Feb 19, 11:38 AM
    HI

    i'm the executor of a will of a deceased family member (date of death 7 May 2016)

    I completed all forms, including relevant IHT forms as the estate was over the IHT threshold, paid for a probate valuation of the deceased's house by a RICS Sureyor, was granted probate, paid IHT on the liquid assets of the estate and opted to pay in instalments for the remainder due on the property.

    I was contacted by the District Valuer by phone in June 2018 as they had received instruction from HMRC to query the valuation. Several months and phone calls later they came to inspect the property in September 2018 and gave me their revised valuation late October 2018 which is £325,000 (£50k more than the Surveyor's valuation of £275k). This leaves the estate liable for more IHT.

    i have to agree or dispute the valuation and have been unsure what to do.

    The Valuer says they contacted the Surveyor to ask for their reasons for the valuation but have obviously chosen to disregard them. The District valuer (who by her own admission is not a building surveyor) said she had asked a colleague about costs to repair defects in the property (it is in poor condition) and had taken these into account. They had also used larger houses in a more desirable road as their basis for the valuation.

    Whilst tidying up the paperwork for the estate in January i came across a letter from HMRC from October 2017 stating they would not be making any more queries about any of the assets (with the usual caveats about giving false information etc).

    I spoke to the IHT helpline who said that i should raise it with the District Valuer but that they thought that if i'd had that sign off i should not have been contacted by the DV.

    The District Valuer said they would have to contact HMRC and make enquiries.

    I heard yesterday that HMRC still require the valuation from the DV and am now under pressure to agree to it or provide evidence as to why i disagree.

    i haven't seen any evidence of the enquiry to the DV about the valuation nor of their response to the DV about their enquiry following that letter. Everything has come by email or phone call apart from the valuation from the DV.

    Any advice appreciated - i don't know whether to just agree it or fight it, i don't know why they won't accept the RICS valuation, surely the Surveyor should be able to defend it ( he has been on sick leave from work so i haven't been able to speak to him).

    Many thanks
    Originally posted by RJF71
    The only solution is to get your solicitor to negotiate with the DV. The DV staff should be qualified to the same level as the RICS staff.
    • RJF71
    • By RJF71 12th Feb 19, 12:13 PM
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    RJF71
    • #3
    • 12th Feb 19, 12:13 PM
    • #3
    • 12th Feb 19, 12:13 PM
    Thanks, are you recommending solicitor to do negotiation as that's the best way of getting a result? I haven't used a solicitor for probate as it was a straightforward estate.
    • getmore4less
    • By getmore4less 12th Feb 19, 12:45 PM
    • 34,776 Posts
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    getmore4less
    • #4
    • 12th Feb 19, 12:45 PM
    • #4
    • 12th Feb 19, 12:45 PM
    20% is a significant difference from mid point to mid point.

    Should always check any valuations against the local market data to see if it looks reasonable.


    What other evidence do you have from the time?

    Evidence of market movement can help as well.

    if you want the solicitor to negotiate you need the evidence(it will cost more if you let them collect it)

    The valuer should also provide an additional statement of why they think there is a difference.
    • RJF71
    • By RJF71 12th Feb 19, 1:12 PM
    • 8 Posts
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    RJF71
    • #5
    • 12th Feb 19, 1:12 PM
    • #5
    • 12th Feb 19, 1:12 PM
    20% is a significant difference from mid point to mid point.

    Should always check any valuations against the local market data to see if it looks reasonable.


    What other evidence do you have from the time?

    Evidence of market movement can help as well.

    if you want the solicitor to negotiate you need the evidence(it will cost more if you let them collect it)

    The valuer should also provide an additional statement of why they think there is a difference.
    Originally posted by getmore4less
    Thank you.

    I've got evidence of sold house prices locally. However the house is in a road where they are mostly unique and is probably the most underdeveloped/unrefurbished house in the road as well as the smallest. Zoopla can show me a 19.9% increase in the house values over the last 5 years or 0.36 over 12 months.

    The District Valuer did not provide any evidence other than 3 values of house sales for bigger properties on bigger plots in better states of repair in a road in which all the houses have bigger gardens, better views etc. I think they have used a formula per SQ M of external area to calculate a land value and then applied it to the property in question.
    • Ganga
    • By Ganga 12th Feb 19, 3:20 PM
    • 1,536 Posts
    • 870 Thanks
    Ganga
    • #6
    • 12th Feb 19, 3:20 PM
    • #6
    • 12th Feb 19, 3:20 PM
    Has the house been sold? if so how much did it sell for,ie the valuation by the RICS surveyor or the valuation by HMRC.
    ITS NOT EASY TO GET EVERYTHING WRONG ,I HAVE TO WORK HARD TO DO IT!
    • RJF71
    • By RJF71 12th Feb 19, 3:31 PM
    • 8 Posts
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    RJF71
    • #7
    • 12th Feb 19, 3:31 PM
    • #7
    • 12th Feb 19, 3:31 PM
    No the house has not been sold yet and at the time of the valuation by the DV there was no plan to sell
    • getmore4less
    • By getmore4less 12th Feb 19, 4:24 PM
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    getmore4less
    • #8
    • 12th Feb 19, 4:24 PM
    • #8
    • 12th Feb 19, 4:24 PM
    How much lower was the valuation than the other better properties that sold around that time.

    Is there nothing comparative but not as good that you can use to set a low price.

    What do you really think it was worth

    The original valuer should be able to spin the differences.

    When there are not good matching samples and properties are all different there is still a leeway for valuation between a positive spin and a negative one.
    • RJF71
    • By RJF71 12th Feb 19, 4:47 PM
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    RJF71
    • #9
    • 12th Feb 19, 4:47 PM
    • #9
    • 12th Feb 19, 4:47 PM
    Thanks

    The DV is quoting properties that are 4 & 5 bedroom with large gardens, couple of them need modernisation but prices £410-475k.

    our property needs new roof, new windows, central heating, wiring, bathrooms, proper kitchen (it is pretty much as it was I was small in the 70s, even the curtains). there is damp, there has been subsidence - sort of fixed in the 90s but the plastering was never decorated over. Surveyor valued it at £275k. it would need a lot of money spending and i'm not sure it's mortgageable for any potential purchasers in its current state. it has lots of potential and is in a great location. The houses on that road hardly ever come up for sale. there are two other dilapidated properties that were sold around that time - one a 6 bed Victorian terrace for £246k and one a 3 bed semi detached for £247k - I can provide those as evidence.

    I would be happy to settle at a £300k valuation I guess but the original Valuer has not been very helpful in responding to me and the District Valuer seems to have ignored their reasons for the original valuation.

    It's just difficult to know how to approach it to get a good compromise.
    • getmore4less
    • By getmore4less 12th Feb 19, 5:04 PM
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    getmore4less
    If they are your comparisons then you have a uphill battle £100k+ fixes a lot of stuff.

    Not only do you have the base value variable you have the refurb variable.
    • Keep pedalling
    • By Keep pedalling 12th Feb 19, 5:25 PM
    • 6,037 Posts
    • 6,929 Thanks
    Keep pedalling
    I think the only way to get a true value is to put it on the market. Is there any reason why you are hanging on to what seems a potential money pit?
    • mgdavid
    • By mgdavid 12th Feb 19, 5:27 PM
    • 6,024 Posts
    • 5,416 Thanks
    mgdavid
    ............. District Valuer did not provide any evidence other than 3 values of house sales for bigger properties on bigger plots in better states of repair in a road in which all the houses have bigger gardens, better views etc. I think they have used a formula per SQ M of external area to calculate a land value and then applied it to the property in question.
    Originally posted by RJF71

    Isn't this the bulk of the evidence you need to fight it?
    Plus the bit you said about the DV not being a building surveyor?
    You seem to have done everything correctly and the DV to my mind is on thin ice. If you don't contest it, how much extra tax are you going to pay? Can you afford or justify effectively chucking that amount away?
    The questions that get the best answers are the questions that give most detail....
    • RJF71
    • By RJF71 12th Feb 19, 6:21 PM
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    RJF71
    Thanks mgdavid, potential extra liability would s £20k if we donít contest.

    Current suggestions by estate agents are actuall £375k for market 2 years after date of death but the market is still booming in that school catchment area and donít want to use that as valuation for IHT. Complicated family reasons for not being able to sell it any earlier.

    I am confused as to why HMRC challenged the valuation so long after they gave me clearance in 2017 and with only the reason of the valuation looks a bit low according to the district valuer .

    It all feels very subjective and I suppose I just wanted some perspective as to whether itís worth the fight or not. I suspect the original valuer (surveyor) might have thought he was doing us a favour keeping the valuation low
    • lincroft1710
    • By lincroft1710 12th Feb 19, 6:23 PM
    • 11,494 Posts
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    lincroft1710
    District Valuers are usually RICS qualified. If you want a professional to negotiate on your behalf with the DV you need a Chartered Surveyor
    • getmore4less
    • By getmore4less 12th Feb 19, 7:19 PM
    • 34,776 Posts
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    getmore4less
    If you will go with 300k what evidence do you have the market moved 25% in 2-3 years since DOD.
    (not zoopla)
    • Tom99
    • By Tom99 13th Feb 19, 4:14 AM
    • 3,645 Posts
    • 2,551 Thanks
    Tom99
    Since you are talking about a saving of £20,000 why not pay the £500 or so for a 2nd RICS valuation. Provide as much info as possible re the repair costs, has any of this now been done or costed?
    • getmore4less
    • By getmore4less 13th Feb 19, 6:42 AM
    • 34,776 Posts
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    getmore4less
    It may not be a £20k saving because there may be a CGT bill accumulating while they keep the place and do it up.

    Not clear if anyone is living in it if not there are other costs accumulating.
    Council tax should have kicked in by now.

    Also the roof that needs replacing seems have lasted nearly another 3 years so not that urgent at DOD.
    • RJF71
    • By RJF71 13th Feb 19, 11:49 AM
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    • 0 Thanks
    RJF71
    Thanks everyone for views advice and opinion. I've asked the District Valuer for further clarification of their valuation and why they were asked by HMRC months after I received clearance to look at the property. I will wait to hear from them before making a decision. The intention has always been to sell the property as per the terms of the will however one beneficiary has been reluctant to let go.

    I probably need to get past the fact that it feels like HMRC are trying to squeeze everything possible out of the estate even though I wasn't trying to downvalue the house and thought that a RICS valuation would be the most robust one to get.

    I will post an update for those that are interested!
    • getmore4less
    • By getmore4less 13th Feb 19, 12:00 PM
    • 34,776 Posts
    • 21,211 Thanks
    getmore4less
    A beneficiary can't stop a sale unless they already own some of the property and are on the legal title.

    If they have not been able to buy it off the estate in 2 years tell them time is up.

    Always good to get some feed back on real cases for others to use as reference.
    • RJF71
    • By RJF71 13th Feb 19, 12:09 PM
    • 8 Posts
    • 0 Thanks
    RJF71
    A beneficiary can't stop a sale unless they already own some of the property and are on the legal title.

    If they have not been able to buy it off the estate in 2 years tell them time is up.

    Always good to get some feed back on real cases for others to use as reference.
    Originally posted by getmore4less

    Thanks, the beneficiary isn't blocking the sale, we were just trying to be kind and understanding. They are not on the legal title. Time is up now
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