We’re having a family argument about what price executors can sell a house for. I along with my sisters  are sole beneficiaries of my late Father’s will, primarily this involves a house that has to be sold. However my sisters are executors of the will and therefore not taking advice entirely on the house value i.e. pricing too high.  I am more realistic with the value and would like to know where I stand on this issue, is it up to the executors to decide probate value of the house or should it be the beneficiaries of the will?

Probate Quotes                    Probate Disputes

Answer to your probate question: what price can executors sell a house for?

It is up to the executors to put a price on the house.  If it is too low HMRC could ask the District Valuer to give a valuation and the executor would be responsible for the penalties if he had valued it too low and underpaid tax. If it is ridiculously low, then the beneficiaries might decide to sue the executors for not doing their job properly if they can prove loss. The executors must aim to get a fair price for the house.  That said, beneficiaries often tend to be keen for the house to be sold pronto, so “executors sales” are often a little under full market value to attract buyers who can go ahead immediately. But it would be prudent for those who might lose out to agree first.If the executors probate valuations are to high, and as a result, there is an undue delay in selling it he has to account to the beneficiaries.  If as a result, the beneficiaries end up with too little they could sue the executor for their loss, but they would have to prove what that loss is in cash terms. That is not too difficult these days! Checking if the price the executors are asking for a house is at least in the right ballpark is relatively easy.But if the executors want to do their job thoroughly, they would ideally get a paid formal valuation from a Chartered Surveyor. That said, getting three valuations from local estate agents is a perfectly sensible way to proceed.  Zoopla and many other property sites also have interesting comparisons. But other houses in the same street may be very different for the one your executors are selling.  If all the estimates are wildly different or seem unreasonably low, maybe take another opinion.  But an executor who prices at the top end will usually be seen as trying to do the right thing for the beneficiaries, as long as they listen to advice on subsequently reducing the price. As an insider tip, they should rehash the details, and put in a different photo and folio number when revamping details.  It is surprising how often a changed set of property details will awaken interest in previously uninterested buyers.UPDATE – make life easier….For executors wishing to minimise the burden of insuring, repairing, protecting and selling a property, we have found this really useful service.

Probate Question: probate value house contents.

For probate please advise me on what contents need to be valued in the home. All our furniture, carpets are many years old – how does one value items of little value. We cannot give our teak furniture away. Does one add crockery and such like. Ornaments possibly, and here quite a few items in the house are my own personal possessions and not my late husbands. I am finding this part of probate very difficult. Valuing the house was not a problem.

Probate Answer: how to value house contents.

If the current death may create an Inheritance Tax bill, get a professional value for house contents.If it is possible that Inheritance Tax might be payable at some time in future, then you should obtain a reasonably accurate valuation – you may be surprised that some of your “old” bits and pieces are actually antiques.  If it is possible any of the house contents might be valuable, a paid valuation might be wise to avoid HMRC penalties or allegations of selling items below value or favouritism in giving some folk valuable antiques and others throwaway trash. The Taxman and beneficiaries are far less likely to question a written professional valuation.  Some Chartered Surveyors may provide this service or maybe a member of the National Association of Auctioneers and Valuers.If there is nothing of value at all, then just make a guess at what it could be worth – a couple of thousand pounds perhaps.  What you are looking at is half of the contents, or the value of these which belonged to him, plus half the value of joint assets.  And that does include the cutlery, crockery etc, though in most cases that will be of negligible value.If everything is left to you LEGAL spouse, then the valuation may be almost irrelevant, but you still need to retain records, copy Will and HMRC forms to prove that the Transferable Nil Rate Band for Inheritance Tax will be available when you die, and leave up to £650,000 free of IHT rather than just £325,000 (you may have won the lottery in the meanwhile!) (Or more with the new Property Nil Rate Band.)Do bear in mind that the value for insurance purposes is based on new for old – so a really old and tacky sofa could be worth nothing – but if it was high quality it might cost £2000 plus to replace, and that would be the insurance value.

Your probate questions: what price can executor sell a house for?

Probate Disputes.December 2018.

Inheritance Tax is at present a tax which is relatively easy to avoid, legally, provided you contact our IHT Planning team in good time.  A very low cost initial review can pave the way for massive savings to the benefit of future generations of your family.  But in this case, it was clearly left too late….Or should we say, trying to avoid Inheritance Tax.  The Telegraph reports:

“A 56-year-old woman has been sentenced today to two years in jail having lied to HMRC about the value of assets she inherited after the death of her aunt. She claimed to have inherited £285,000 when the sum was in fact £1.5m.

She also lied about financial gifts made to her by her aunt before her death, the taxman said.HMRC has issued details of the case and conviction to deter others from understating inheritances in order to avoid death duties.Currently estates below £325,000 are not subject to the tax. Assets above that threshold are taxed at 40pc.Married couples or civil partners can add their two “nil rate bands” together, giving a joint allowance of £650,000.

HMRC said that Ms Bunn, from Hassocks, Sussex, confessed, following an investigation, that in addition to understating the value of her inheritance she also “failed to declare substantial cash gifts from her aunt while she was alive”.

Only gifts within certain strict limits are exempt from inheritance tax, unless the person who makes the gifts lives on afterwards for at least seven years.”Main Inheritance Tax page,More on the story. 

I am the sole executor and a major beneficiary in a will that names 15 other beneficiaries and I have a question about Deeds of Variation.I would like to make a deed of variation so that my inheritance passes either directly to my children or to my grandchildren.  As I understand it that means that my estate would not be liable for any Inheritance Tax if I died within 7 years.I have not discussed this with them yet as I want to know if it is possible to do this before I talk to them.If I make the variation when I send the distribution account to all of the beneficiaries would I show myself as the beneficiary or those named in the deed of variation?

Deed of Variation Disclosure Answer.

The most common reason for Deeds of Variation is, as you say, to legally avoid unnecessary Inheritance Tax.Too often, people’s Last Wills are not kept up to date and already wealthy children inherit money they have no need for from their parents, when their children and grandchildren are in genuine need of help with massive mortgages, school or university fees to pay.Creating a variation to under age children is more complex than a standard variation as it means that trusts have to be created.As far as the distribution account, it should reflect the actual situation, but if you don’t want to tell others, use the deed of variation immediately after you have distributed to the other beneficiaries. In other words, there is no reason that anyone other than your intended beneficiaries even knows you have made the Deed of Variation (apart from us and HMRC of course!) So in general, there is no requirement for deed of variation disclosure except to the Taxman where it affects Tax, normally IHT or capital gains tax.I have had a word with Deed of Variation and tax planning solicitor and it is likely that we would charge just our basic fee for such a variation.Main Deed of Variation page.

You can apply for probate yourself or use a professional firm such as us – we are half the cost of many.   Either way, you may find our free video and downloadable guides on how to go apply for probate helpful.

• For information on who can apply for probate go here.
• Where to apply for probate here.
• See also Is Probate Needed?

In order to apply for probate there are five essential steps (we’ll go through each step further down the page):

1. Fill in the application.
2. Fill in the appropriate Inheritance Tax form (Nil Rate Band Transferable and or  IHT400).
3. Pay any Inheritance Tax.
4. Send off your application to the relevant (normally) Harlow.
5. You used to have to swear an oath at the Probate Registry that all the information you have provided is true and complete. Now it is just a Statement of Truth and no need to visit a solicitor.  However, if you are wrong, careless or deceitful – watch out, the penalties are severe, and they may well come out of the executor’s own pocket.

Apply for probate in more detail.

1. The application form

You can either:

• Fill in the probate application online for yourself. But be aware that if HMRC are involved, their form will need to go in first, and they will supply you with a reference number when it is approved which needs to go on the Probate Application before it is sent off.
• Call the Probate and Inheritance Tax “helpline” – 0117 930 2430 (24×7 and forms only) or 0300 123 1072 where you may get to speak to a human (Monday to Friday, 9 am to 5 pm). They might help a bit but no legal advice (and you have to get through first!)
• Call in professional help to make sure everything is done properly.  We can recommend either “add on” help or professionals who will take over everything, as you wish. There are a few other options listed on the add-on page, so please check it out and always ask me for at least a comparative probate quote so you know you are not paying twice as much as you need too – which is surprisingly common.

 2. The Inheritance Tax Form.

Before you can fill in the IHT form you have to be sure that you are fully aware of:

• Everything the deceased owned at the time of their death, including their share of joint assets.
• Everything the deceased has given away in the last seven years (sometimes the last 14 years) unless it falls within the IHT exemptions.  This includes anything which may have been sold under market value to a connected person, or (for example) giving away one of a pair of vases reduces the value of the estate as they are worth far more as a pair.
• Any trusts the deceased set up or had an interest in the same time frame. Many savings and investments are in trust, so check carefully.

You must complete an Inheritance Tax form – even if you think no tax is owed.For low-value estates where you are absolutely certain that there is no possibility of Inheritance Tax being payable, this may be fairly easy.  But be sure you are right in your assumptions and have proper valuations of anything which could be valuable. On recent deaths, the IHT205 form is no longer required in the estate is an excepted estate*.

3. Pay Inheritance Tax or agree on a payment plan with the Tax-man.

Get confirmation from HMRC to send off with:

4. Send off your application for the Grant or Letters of Administration..

Your application pack needs to include:

• Your completed probate application form – the PA1.
• The completed IHT form and confirmation of payment from the Taxman.
• An official death certificate.
• The original will and 2 photocopies.
• The originals of any codicils and two copies of each (codicils are changes to a Last Will and testament.)
• The probate application fee (the application fee is nil if the valuation of the estate is less than £5,000.)

Always apply for extra copies of the grant of probate – they are just £1.50 each and will make it much easier to collect in the assets of the estate.   Sending one copy of the grant of probate to ten organisations one after another and waiting for each, in turn, to send it back – if they remember can be incredibly slow and frustrating (trade secret!)

5. Swear an oath at the Registry.  No longer needed.

You used to have to swear an oath –  a ‘promise’ that the information you have given is true and complete to the best of your knowledge.  See penalties above!Now just wait for the Grant to arrive, but keep an eye open for questions – the case will be stopped until they are answered. Chase up at the earliest permitted time just to ensure you are not the cause of the probate delays.

*What is an Excepted Estate?

It is one where it is not necessary to submit a “full account” to the Taxman, generally the IHT 400 and its’ many, many additional pages (potentially up to almost 1oo pages at the last count). There are broadly three types of excepted estate:

1. Low value – the gross value of the estate and relevant lifetime transfers do not exceed the nil rate band.
2. Exempt – the aggregate of the gross value and relevant chargeable transfers does not exceed the threshold set out below and passes to spouse, civil partner or charity.
3. Non-domiciled or deemed domiciled in the UK and after consideration of the type of assets has a gross value no more than £150,000 or those not deemed domiciled or domiciled outside of the UK.

To discover if an estate is an excepted estate, you must identify when the person died and then apply the following:Death on or after 1^st January 2022 and the estate:

• is valued below the inheritance tax threshold;
• is worth £650,000 or less and any unused threshold is being transferred from a spouse or civil partner who died first;
• is worth less than £3 million and the deceased left everything to a spouse or civil partner living in the UK or to a qualifying charity; or
• the deceased was living permanently outside the UK when they died, and the value of their relevant UK assets is under £150,000.

The person died after 1^st September 2006 and on or before 31^st December 2021 and the estate qualifies as an excepted estate if it:

• is valued, including non-exempt lifetime transfers below the inheritance tax threshold at the time they died;
• is worth less than £1 million and the deceased left everything to a surviving spouse or civil partner living in the UK or to a qualifying charity; or
• the deceased was living permanently outside the UK when they died, and the value of their UK assets is under £150,000.

Apply for Probate.