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TonyTax
TonyTax, Tax Consultant
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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My father died last July and we received probate having submitted

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My father died last July and we received probate having submitted the Iht 205. When we sold his house in February it went for 16k more than the price we put on the IHT 205. This has taken the value of his estate over the IHT threshold.
Do I need to complete the IHT 400 in every section or can I just inform the revenue of this price differential and pay the IHT due on the difference?
Secondly, the schedule (IHT 402) claim to transfer unused nil rate band is different with the IHT 400,from the form (IHT 217) we submitted with the IHT 205 and is asking much more information about my late mothers affairs which were dealt with by my now late father. It seems to imply the allowance to transfer will be less. Is this correct? My mother died in 2004. Thank you in anticipation.
Madeleine Hatwell***@******.***
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi.

Can you tell me which part of IHT402 gives you the impression that the amount of unused IHT nil-rate band which can be transferred to your late father's estate is less than you previously thought.
Customer: replied 1 year ago.
Hi Tony
I think I have answered my own question. The allowance for the year mum died is 255000.
Her estate passed wholly to my dad so I think the % to increase by is 100%
Of the allowance for dad. Making it 325000.
Am I right?
Are you the person who is to answer part one of my question?
Thank you
Expert:  TonyTax replied 1 year ago.
The transfer is the unused percentage of the nil rate band level in force at the time of the second death.

I see no need to report an increase in the probate value of the of the property unless it was undervalued. You just need to report a capital gain after deduction of selling costs (legal fees, selling agent fees etc). The deceased estate will be entitled to an exemption for the first £11,000 of the gain and the balance will be charged to Capital Gains Tax at 28%. Call the number here to have the estate registered for self-assessment so that the gain can be reported. The paper version of the estate tax return is here.

I hope this helps but let me know if you have nay further questions.
Customer: replied 1 year ago.
Hi Tony
Thank you. Is the capital gain on the difference between the value for probate and the actual sale price? This was 16k.
The agents and selling fees were around 12k
The house was valued last August 2014 and we took the middle value of three different valuations.
The house went on the market 4 months later so there had been an increase in house prices by then as well.
Or is the capital gain on the entire value of the estate after fees?
Expert:  TonyTax replied 1 year ago.

The capital gain is as you described and on assets sold by he estate, not those passed to beneficiaries.

TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15763
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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