Provided you can satisfy any enquiry from the Revenue that the probate valuation of the property was correct and it was simply an unintended oversight that it had more potential or someone came along and saw the potential and decided to offer an obscene amount of money for it or, for example, the property went to auction and everyone saw this potential and it sold for an obscene amount of money, then there is no problem with it.
These departments in the revenue however do speak to each other and this kind of thing is on their radar and hence, if you sell the property for £600,000, six months after it was valued for £425,000, the revenue are going to want to know why. At this stage of course, you don’t know whether the property is going to sell for £600,000 or at all.
In cases like this, I would write to the revenue stamp office and get a definitive answer from them because they are the ones who after all enforce any alleged underpayment of tax. I can tell you however that they are likely to simply say it’s an underpayment of tax and they want a chunk of money.
The safest way therefore would be to sit on it for a period of time and then bite the bullet on the capital gain. Of course, the beneficiaries and the executors have to be in agreement with this.
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