Paying beneficiaries

jpd said:

The fact that the property was later sold for a higher value means that the estate has to pay Capital Gains Tax

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Beneficiaries are responsible for taxes on their inheritance.

jpd said:

Obviously, the executor has to file a revised affidavit with the Revenue,

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My understanding is that a sale price difference from valuation is not a matter for a corrective affidavit.

IANAL

T McGibney said:

No, the probate valuation determines the amount of the inheritance.

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No it doesn't - the inheritence tax is on what you receive finally

It is true that in some cases, the CGT will offset some of the CAT

jpd said:

No it doesn't - the inheritence tax is on what you receive finally

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If you receive a full or partial share in a house, the tax is charged on the value of that house at the applicable valuation date.

If the house collapses or burns down subsequently, that's neither here nor there.

Just to be clear, in the scenario I posted, there is no full or partial share of the house being inherited. The estate has an asset which is to be sold, the proceeds of the estate being split 4 ways.

The question was "when unceretainty exists, why not value it high for probate, thus avoiding having to pay tax on any increase in value locked in on sale", i.e. no estate tax if sale price >= probate price.

But CAT may be charged on the probate value

There are many examples of people inheriting houses valued pre-crash in 2007/8 and then selling the house a year later at a greatly reduced price, but having to pay tax on the probate value. They did, of course, have huge losses to carry forward against future gains