Probate valuation of property V Actual sale price.

K

Kimmagegirl

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If a house is entered for probate purposes with say a value of €500k on it. Is tax calculated on this figure?
If the house then sells for €400k can the probate figure be altered to show the actual sale price? Can tax paid be reclaimed?
 
It is treated as if the value has changed between the valuation date and the time of sale, and not as an error in valuation. Therefore you can not go back and reclaim the tax.
 
If it sells for MORE than the €500k is it treated the same way? Do I have to pay the additional tax?
 
If the value increases its a Capital Gains Tax exposure. Proceeds - selling costs - value in inheritance.
 
Suppose a property is valued for probate at €300k. It is sold, and the proceeds of sale (after costs) come to €400k. There is a capital gain of €100k. That must be assessed for CGT.
 
So does this suggest that I should enter the value of the property on the Ca25 form at below what I expect the actual sale price to achieve?
It seems that if I put a value on it at €500k and it sells for €400k I am assessed for tax on €500k and cannot claim the tax back. However if I end up selling it at €450k after putting a value of €400k then I just pay the additional CGT on the extra €50k?
 
If you knowingly undervalue a property for probate, you will most like have the Revenue chasing you and have to revise up the probate value - remember Revenue have lots of information on property prices and can probably estimate the price reasonably well.

The probate value is only an estimate but you would want to keep a record of how you arrived at the value - professional valuation, etc.

I wouldn't think it would be a good idea to try and game the system by undervaluing a property but I would certainly do my best not to overvalue it.
 
I think people don't think the Probate process through. It's one thing getting the Probate and another acting on it.

In boom times, precisely because of the difficulty in reaching a value, a lot of people put the house on the market, achieved a sale price ( clearly market value), went ahead and got their Probate and sold immediately. So there is one valuation and a clear idea of the tax liability.

Of course, none of this arises if there is not going to be a tax liability. An estate of 250K between five means that tax is never going to be an issue but an estate of 1m between two will be. And perhaps that is why people should take more specific tax and legal advice

mf
 
jpd said:
If you knowingly undervalue a property for probate, you will most like have the Revenue chasing you and have to revise up the probate value - .
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There is no question of this. I just don't want the property to sell for LESS than the value I put on it for probate purposes. End up paying tax on the probate figure and not being able to claim this back.
I have no problem paying the extra tax if the property sells for more than the probate price.
 
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