I have been getting on really well with my new employer recently, so much so he's just throwing more and more work my way, which is ACE!!!
BUT... he threw me the Capital Gains tax query to me last week. Knowing nothing about it I had to do some research into it. Having understood it for the most part im still at a loss for my particular predicament.
A lady has sold her inherited house last year and done most of the ground work in the way of bills etc to work out what she has to pay. However, at the time the of the inheritance the house was offically valued at 40k, but i've been looking on housing valuation sites etc. and found the house was more likey worth DOUBLE this due to houses on the same road/same style etc selling for around this price. Now, which figure will HMRC take? the original valuation of 40K which is grossly understated or the 'proper' valuation of 80k(ish) (based on actual data based on sales on the street) as obvisiously this will effect how much she owes to them based on what the valuation is!?
Can anyone help? Short of phoning HMRC i cant find anything online to help me in this predicament... :(
The landregistry is run by HMRC, so they have all the records of sales and have a pretty good idea what properties should be worth going way back.
If the property was valued at 40k when she inherited it, then if the HMRC query this price - it will be to the trustees of the estate, not her.
She has to use this price for the value as that is what was agreed at probate as the value to be transfered to her when she inheritaed it. The HMRC also has to agreed to in order for probate to go through, and I think they do have the right to revisit it later if they deem it wrong. You have to use the value as this is the value on record that she inherited it at. The property could have been in a really poor condition which is why it may have been valued so low.
Of course with a low valuation when she inherited it, now it may mean she ends up with a high CGT bill when she sells it.
@BB the valuation came from the 'Probate' back in 2000
@YLB yeah thats what i thought. and this is what im querying with reagrds to your last statment, if it is at the 40K then she will have to pay the CGT on 28K (gross figure, on whats left) and if its the 80K i think it should be then she may end up having to pay nothing... which is why this is such a BIG deal i get this right... :/
.........However, at the time the of the inheritance the house was offically valued at 40k, but i've been looking on housing valuation sites etc. and found the house was more likey worth DOUBLE this due to houses on the same road/same style etc selling for around this price. Now, which figure will HMRC take? the original valuation of 40K which is grossly understated or the 'proper' valuation of 80k(ish) (based on actual data based on sales on the street) .......
Hi I'm sure you've thought of this but I wouldnt be surprised if prices on the street were increasing at say 25% p/a in 2000. So even a matter of months would make a large difference as well as the state of repair.
