Are there capital gains between death and the selling of an inherited house?

[Allen]

Inland Revenue Affidavit (CA24), which much accompany an application for probate, asks for the “Gross market value at the date of death of real and leasehold property”.

In the case of a house which was the principle private residence of the deceased, if the house is sold by the beneficiary, say, nine months after death, and is sold at a higher price than declared on the form CA24, is this increase in price liable for Capital Gains Tax?

If so does it make sense to put the maximum estimate of the house value on the form CA24, assuming that there will be no inheritance (capital acquisitions) tax liabilities?

 

[T McGibney]

If so does it make sense to put the maximum estimate of the house value on the form CA24, assuming that there will be no inheritance (capital acquisitions) tax liabilities?

It makes sense to use the best estimate available. If the best estimate you've produced for CA24 is wildly at variance with a sale price achieved 9 months later, that suggests the estimate you have used is wrong - assuming of course that you're not in a period of spiralling house price inflation.

For this reason, valuations warrant great care.

 

[Brendan Burgess]

If so does it make sense to put the maximum estimate of the house value on the form CA24, assuming that there will be no inheritance (capital acquisitions) tax liabilities?

Or to put it another way, make sure that the value does not undervalue the house as there will be CGT to pay on the difference between the sale price and the valuation at date of death.

Brendan

 

[PMU]

You should obtain a letter stating the valuation at the date of death from a local estate agent and put this value on the CA24 form.