Issue re valuation for probate

[Hoagy]

Hi, I need some advice please.

A relative died intestate over Christmas last and I am the sole beneficiary.

The only asset is a house, which was in extremely poor condition.

I got a local EA to give me a valuation of the house as it was on the date of death.

Following discussions with my solicitor and accountant, who didn't advise against it, I decided to go ahead and renovate the house, which I now have done at a cost of approx. 80K.

Now, my having accepted an offer, the solicitor is saying that the selling price should be the value for probate, not the valuation at date of death, which means I can't claim the 80K expenses.

I understood that there would be in effect two transactions, the first to deal with probate and CAT, the second to deal with the sale of the house and CGT.

Has anyone come across this situation before?

 

[Vanilla]

What is the sale price? What is your relationship to the disponer? What is the date of probate?

 

[Hoagy]

Hi Vanilla,
The sale price is 230K, original valuation was 160K.
This was my sibling's house. I previously had an inheritance from an aunt, though.
We haven't applied for probate yet,we're about to.

 

[beffers]

You put the house on the market, have accepted an offer on it, but the house is not yours (legally) to sell yet as you have yet to apply for probate? Are you aware - and more importantly is the buyer aware - that it could be another 6 months before Probate is granted and the sale can go through? It could be even longer if the executor of the estate is a solicitor and he/she is doing it. Is your buyer willing to wait that long to move in?

If I were you'd I'd think about getting legal advice else where. I think your solicitor is incorrect in saying the probate value should be the value of it now, after the improvements have been done. From what I have read, the value is taken from the time of death of the deceased, not some random date down the road decided by the executor & beneficiaries. You could give Revenue a call and ask them for some clarity on the upon matter.

Lots of info here

http://www.revenue.ie/en/tax/cat/index.html

and here.

http://www.revenue.ie/en/personal/circumstances/bereavement/inheritance-tax.html

 

[hastalavista]

AFAIK when the deceased left no will probate is not available: it requires a grant of administration.

It is incorrect to use the word beneficiary also in this context, equally there are no executors

See here
http://www.irishstatutebook.ie/1965/en/act/pub/0027/sec0069.html

As pointed out earlier you spent money on an asset that is not yours, you jumped the gun.
You also jumped the gun offering an asset for sale that was not and is not yours yet.

Have you issued and signed a normal contract for sale with you as the owner? if so you are exposed to the purchaser suing you under a number of headings.

On the issue of estate administration expenses, in the case of a will the law is very clear that no expenses, other than funeral and lawful debts at time of death, can be charged against the estate unless they are specified in the will, this is why wills have the clause allowing lawyers charge for their work. If a lawyer drafts a will and forgets to add in this clause then he cant charge for probate work

Similar rules apply for administration so your 80 cannot be charged against the estate if thats what you have in mind, its not clear from the post.

If all the work was vouched etc and above board the purchaser may be willing to pay you for the expenses, however once he sees you are over a barrel.....

The taxes due here are inheritance tax due on the 160 plus any other assets less funeral expenses etc so lets say 160.

Then you sell the house for 230 and you pay CGT on the 70.



In passing, have you got a BER as part of the exercise [broken link removed]