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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15917
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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My 2 sisters are executors to my late parents estate.

Resolved Question:

hello,
My 2 sisters are executors to my late parents estate. Their house was sold at the beginning of April 2014 for £315,000,00. The executors have informed me that the HMRC are reconsidering the capital gains tax. Is this possible as the executors were to close all administration in July 2015. HMRC have stated they will reply to the executors early next year.
Is this normal procedure?
Thank you
R.Abbott
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. Can you tell me if the house was sold by by the executors from within the estate or whether it was transferred out of the estate to the beneficiaries and then sold. What was the probate value. What was the date of death of the owner?
Customer: replied 1 year ago.

the house was sold by the executors. it was on the market for £335,000,00. my father died on 23. 6. 2013

Expert:  TonyTax replied 1 year ago.
Thanks but I need to know the probate value as declared for Inheritance Tax purposes.
Customer: replied 1 year ago.

the executors have not been forthcoming with updates and information for 2 half years so unfortunately am unable to answer your question.

Expert:  TonyTax replied 1 year ago.

Thanks.

Leave this with me while I draft my answer.

Expert:  TonyTax replied 1 year ago.

Hi again.

Frankly, since the executors are not providing you with any information, it's difficult to be precise about what HMRC are doing.

HMRC are taking ever closer interest in property transactions where the calculation of the gain includes a valuation such as probate value. I can only surmise that HMRC have passed the case to the District Valuer with a view to them assessing the probate value of the property to compare to the one declared by the executors. This is a common occurrence where the property is sold at a much higher price than the probate valuation not too long after the death of the owner, your father in this case. Such an enquiry will take time as like many government departments, HMRC and the District Valuer are short staffed. It is odd given that the property was sold for less than was originally being sought.

There are some notes on what HMRC can do here, here and here which you may find of interest.

I hope this helps but let me know if you have any further questions.

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