Difference between property probate value and sale price in excepted estate

Trusts Discussion
1

I am dealing with an excepted estate where the death occurred in April 2024 so that it was not necessary to complete an inheritance tax account as part of the application for the Grant. The estate included a very run down/dilapidated property which it was always intended to sell at auction without any structural/renovation works being carried out. The total value of the estate, including an estate agent’s best case scenario estimated value for the property of £80,000, was well within the deceased’s nil rate band. The auction sale of the property completed in March 2025, the property selling for £110,000. Even including this value for the property, the total estate value is still well below £325,000.

I am now going round in circles trying to work out how to deal with this. Is there a way of formally substituting the sale value for the estimated probate value in an excepted estate?

If it should properly be dealt with as a capital gain, how should we ascertain a more accurate date of death value? Particularly in view of the state of the property and overall value of the estate, the administrators decided not to go to the expense of obtaining a RICS valuation of the property prior to the sale.

I am anxious to deal with the matter correctly and would be grateful for your thoughts.

2

Lisa

If there is no IHT liability on the Estate, the probate value is not binding for CGT purposes, as the value has not been ‘ascertained’ (HMRC IHTM 09241–9243).

You could ask the Estate Agent to confirm if the market value at date of death was more accurately stated as the sale value achieved. If they confirm this is the case, there is no CGT liability and nothing further needs to be done. You will also have contemporary financial information to support the valuation.

Andrew Taylor