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TonyTax
TonyTax, Tax Consultant
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Re Late mother-in-laws EstateAfter probate granted, late

Customer Question

Re Late mother-in-law's Estate

After probate granted, late bill of £25,000 care fees received.

a. Inherited property sold for £65,000 more than probate declared value.Can probate property declared value be Amended?

b. If not, which rare of capital gains tax will apply. My wife was both joint executor it me and inherited the house.

Richard Quartermaine
Joint Executor
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi.

Why are you thinking of amending the probate value of the property? How long ago was the property valued for probate purposes? Was the property sold within the deceased estate or was it transferred to you before it was sold? Was it owned solely by you or jointly with your wife?
Customer: replied 2 years ago.

Why are you thinking of amending the probate value of the property? To possibly reduce capital gains tax. The late Mr Ryder died on 14 Feb 2010, and his capital gains tax allowance may be allowable?


 


How long ago was the property valued for probate purposes? Soon after Late Mrs Ryder's death on 15 April 2013.Probate was granted on 24 June 2013 and the house sale completed on 29 Nov 2013.


 


Was the property sold within the deceased estate or was it transferred to you before it was sold? Was it owned solely by you or jointly with your wife? Sadly, within the estate, we were not advised otherwise.

Expert:  TonyTax replied 2 years ago.
Hi again.

I apologise for the delay in answering your question. For some reason, the question was re-categorised and I could not access it.

You will find it hard to have the value changed, especially if there is no IHT liability in any event as you will read here. Certainly, if it is correct, there will be no reason for HMRC to agree to a change. Those notes, however, really refer to a case where the property has been sold at less than probate value.

In your case, it is certainly worth to have the value amended if it was wrong as HMRC even provide a form to make an amendment to an IHT400 which you can find here.

You mention both husband and wife in your last post. If by "and his capital gains tax allowance may be allowable" you are referring to the transfer of an unused Inheritance Tax allowance, you can read about that here. The time limit for making such a claim is two years from the end of the month in which the second deceased died as you will read here.

As long as the property was sold within the deceased estate within the period mentioned under the heading "Executors and personal representatives" here, the estate is entitled to the annual CGT exemption for the tax year of death and each of the following two tax years depending when the disposal took place. The deceased estate is completely separate from the deceased person and all their assets cease to be theirs on their death and their tax allowances only apply against their income up to the date of death. The rate of CGT for a deceased estate is 28%.

I hope this helps. Let me know if you have any further questions.
Expert:  TonyTax replied 2 years ago.
Hi again.

It's been a few days since I answered your question. Is there anything you need further clarification on?

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