Probate & credit cards, agencies

[Clitheroekid]

The house was in joint names. The letter from the solicitor talks about getting 3 valuations from local agents - it might just be a standard letter. But having 3 sets of people come by and stress mum out even more doesn't seem a great plan. Plus also on here I saw tales of people being charged for the valuation if they were honest and said it was for probate, so slightly unsure what to do.

Shall we just say to the solicitor "here's 3 online estimates" - there's no IHT to pay?

Might be the solicitor's standard practice to cover themselves in some way.

really appreciate all the advice, thank you.

Unless the total value of the estate is likely to exceed £1m than having any sort of formal valuation of the house carried out in this situation is an entirely pointless exercise. And even if the value is likely to be over £1m the only effect is that a different form needs to be used.

So I'm afraid that it's a complete waste of time and money for all concerned, especially for the estate agents (unless they're being paid for their valuations, which would be an even bigger waste of money).

The value of the house is only of any consequence if there's Inheritance Tax or potential Capital Gains Tax involved. However, there is neither in this case. Transfers between husband and wife are entirely exempt from Inheritance Tax and as I assume the house is your mum's principal residence there will be no Capital Gains Tax to pay when the house is sold.

Consequently, the value of the house is entirely irrelevant, and can simply be estimated by reference to Zoopla or Rightmove, an exercise that takes about 5 minutes.

I'm afraid this reinforces my suspicion that the solicitor is simply generating unnecessary work to `justify' higher fees. It would be interesting to ask her why she considers a professional valuation is actually needed and see what she replies. If she says it's needed for HMRC she's talking through her nether regions!

[Sunnypad]

thank you Clitheroe

I'll make enquiries as to why the solicitor said about getting EAs round, but I would hope that her fees won't be any different as as a result of it..? I will keep a careful eye on it all in any case.

My mum spoke to a couple of widowed friends this afternoon - they said they also had to have the house valued for probate, so this seems to be a thing? They just put on an act for the EA and filled in the forms etc...perhaps I will have to do this for mum.

Thanks again, really appreciate the help given by all on this thread.

[Howard]

thank you Clitheroe

I'll make enquiries as to why the solicitor said about getting EAs round, but I would hope that her fees won't be any different as as a result of it..? I will keep a careful eye on it all in any case.

My mum spoke to a couple of widowed friends this afternoon - they said they also had to have the house valued for probate, so this seems to be a thing? They just put on an act for the EA and filled in the forms etc...perhaps I will have to do this for mum.

Thanks again, really appreciate the help given by all on this thread.

I don't want to be seem hard-hearted but aren't you in danger of taking more notice of a couple of widowed friends than of Clitheroe Kid who knows what he is talking about?

You can easily value a house from the internet as others have said above and minor errors in the approximate value are irrelevant unless you are talking about an estate of significant value. If it is over a million and complicated, and you don't want to handle probate yourself, surely your Mother should employ a fully qualified Solicitor and pay the going rate?

regards

Howard

[ten0rman]

FWIW, I did the probate for my parents. Admittedly this was 13 years ago so forms may have changed, but I distinctly remember having to obtain and submit two, I think, valuations for their house. This was only on the second death. HMRC accepted the valuations having consulted the local district valuation officer (or some such body with a similar title). In the event, we did have to pay a small amount of IHT, and when we came to sell the house, my solicitor recommended transferring the house into our joint names, there being three of us siblings, all with an equal share in the disposition of the estate. This was before we placed the house for sale. The reason for the transfer was because if the property actually went for more than the valuation (which it did due to a bidding war), we would have three lots of CGT to offset against the increase in price.

I do wonder though, if the procedures for house valuation are different depending on who is handling the probate. I was a private individual and therefore there could be, I suppose, the possibility of some sort of fiddle going on, whereas a solicitor would be assumed to be honest and above board, and therefore could use simpler means of of valuing the house without using other professionals.

Please note that I am not insinuating anything here.

ten0rman

[PinkDalek]

FWIW, I did the probate for my parents. Admittedly this was 13 years ago so forms may have changed, but I distinctly remember having to obtain and submit two, I think, valuations for their house. This was only on the second death. HMRC accepted the valuations having consulted the local district valuation officer (or some such body with a similar title). In the event, we did have to pay a small amount of IHT, ...

If I may, your situation would appear to have been different to the OP's. Yours involved IHT and potential CGT, as you say on the second death. As Clitheroekid has explained, these are not matters that would appear to impact the situation being discussed, on the first death, for the reasons he's stated.

[DrBunsenHoneydew]

As outlined above, a simple Zoopla-style valuation will be sufficiently accurate for purpose and accepted by HMRC Valuation Office provided the house is in a simple joint tenancy passing to spouse by survivorship without IHT etc implications, but not necessarily accepted if it is held as a joint tenancy between the couple and the property formally enters the Estate. Remember also that even if not needed for tax, the house value passing to spouse does come into the Probate Value on the Grant if that has been obtained.

[Sunnypad]

Thanks DrBunsen

what is the difference between these two please?

"simple joint tenancy passing to spouse by survivorship without IHT etc implications, but not necessarily accepted if it is held as a joint tenancy between the couple and the property formally enters the Estate"

[uspaul666]

In the first case, the house is “outside” the estate and forms no part of the inheritance, plays no part in IHT and thus it’s value is not important.

[swill453]

In the first case, the house is “outside” the estate and forms no part of the inheritance, plays no part in IHT and thus it’s value is not important.

Surely then the second one should have said "tenants in common" rather than joint tenancy.

Scott.

[yorkshirelad1]

I'm afraid this reinforces my suspicion that the solicitor is simply generating unnecessary work to `justify' higher fees. It would be interesting to ask her why she considers a professional valuation is actually needed and see what she replies. If she says it's needed for HMRC she's talking through her nether regions!

[snipped]

I would tend to agree with that view. However, having just completed a friend's estate (I was one of two exors), the very nice solr we used (probably not far from the town beginning with C in a town beginning with B) to do the complex bits did the work for a fixed fee (so no need to increase fees). We were organised to get the deceased's house sold (pending grant of probate). The solr wanted to get a house valuation done for probate (two valuations in fact). However, in the end, we just used the price that the house was marketed at (pending/ready for when we got the grant) and which is what it sold for, so no CGT (and even a loss once costs were taken into a/c). Estate was under the NRB, so no IHT. Having been advised to get two house valuations for probate, the solr never really pushed it, and we didn't need it. I suppose if a sale hadn't been in view, a probate valuation would have been necessary but as everyone else has said, rightmove and zoopla for would be sufficient for most things (unless e.g. the estate was substantial and/or liable for IHT on first or second death or outside the RNRB etc).

My take is that the solrs who recommend getting a formal house valuation for probate are just covering themselves, doing "belt and braces". It might be useful to have a line in the sand valuation for later? At the end of the day, it's up to the exors how much "belt and braces" they want to do as it's they that carry the can if there's a problem later.

There may be those in the business who would like to justify higher fees, but I had a very good, pleasant, efficient, polite & courteous experience with the local solrs who did the probate work for us for a fixed fee (FWIW, we did most of the footslogging paperwork ourselves and had the solrs do the more complex stuff and we also felt we should be squeaky clean and take professional advice in case there was a challenge to the estate from estranged/disinherited parties).

IANAL

[Sunnypad]

Pretty sure it's a joint tenancy....all very confusing.

I can see the belt and braces argument might be a factor here.

Thanks again everyone.

[uspaul666]

In the first case, the house is “outside” the estate and forms no part of the inheritance, plays no part in IHT and thus it’s value is not important.

Surely then the second one should have said "tenants in common" rather than joint tenancy.

Scott.

Sorry, I kinda assumed what the second part of the sentence said and didn’t actually read it carefully.

[terminal7]

Unlike the Kid (whose advice is always spot on and well worth taking to heart) - I am a layman, but as previously posted just completed probate on my recently deceased mother's estate. There was no request to even provide supporting evidence on the value of my mother's flat in the relevant form. I spoke to a friendly estate agent and looked on Zoopla and gave an assessment of its 'true' sales value. I received no questions on all the submitted forms and was granted probate as previously mentioned in some 2 months.

There are services (check the net) that provide the 'standard' letters to banks, utilities, local authority etc. I obtained these pro formas for the princely sum of £25 and had a paralegal checking the completed forms.

I had received quotes from 2 solicitors of £4k and £6k for what amounted to some maybe 6 hours work for myself (this included actually taking the probate forms to the Probate Office in London).

I have to say this appears to be an area that some solicitors take advantage of a stressful situation.

T7

[DrBunsenHoneydew]

In the first case, the house is “outside” the estate and forms no part of the inheritance, plays no part in IHT and thus it’s value is not important.

Surely then the second one should have said "tenants in common" rather than joint tenancy.

Scott.

Yes indeed. Mea culpa.

[HerbertViola]

In the first case [joint tenancy], the house is “outside” the estate and forms no part of the inheritance, plays no part in IHT and thus it’s value is not important.

Sorry to resurrect this, but I don't think that's right. Surely the distinction between joint-tenancy and tenants-in-common has no bearing on IHT liability, for obvious reasons. Can someone better qualified than me confirm or refute, please?

[Lootman]

In the first case [joint tenancy], the house is “outside” the estate and forms no part of the inheritance, plays no part in IHT and thus it’s value is not important.

Sorry to resurrect this, but I don't think that's right. Surely the distinction between joint-tenancy and tenants-in-common has no bearing on IHT liability, for obvious reasons. Can someone better qualified than me confirm or refute, please?

You are correct in theory. What can happen in practice, however, is that without a property transfer there may be no need for probate, and then any IHT liability is swept under the carpet, as it were.

It is still owed but never determined. It is usually probate that triggers the determination of IHT.

[HerbertViola]

In the first case [joint tenancy], the house is “outside” the estate and forms no part of the inheritance, plays no part in IHT and thus it’s value is not important.

Sorry to resurrect this, but I don't think that's right. Surely the distinction between joint-tenancy and tenants-in-common has no bearing on IHT liability, for obvious reasons. Can someone better qualified than me confirm or refute, please?

You are correct in theory. What can happen in practice, however, is that without a property transfer there may be no need for probate, and then any IHT liability is swept under the carpet, as it were.

It is still owed but never determined. It is usually probate that triggers the determination of IHT.

In the not-very-contrived case of two siblings owning a £1,000,000 house under joint tenancy, each having £15,000 in an ISA, each willing everything to the other, and one of them dying, what would a solicitor advise the survivor? Don't bother applying for probate to access the ISA, because it is dwarfed by the IHT saving?

I'm guessing not, but it's a genuine question.

[GoSeigen]

In the not-very-contrived case of two siblings owning a £1,000,000 house under joint tenancy, each having £15,000 in an ISA, each willing everything to the other, and one of them dying, what would a solicitor advise the survivor? Don't bother applying for probate to access the ISA, because it is dwarfed by the IHT saving?

I'm guessing not, but it's a genuine question.

The message you are replying to is complete nonsense. Probate and inheritance tax are independent of each other so the necessity or otherwise of probate has no effect on the inheritance tax liability of an estate.

A solicitor should never advise a client to break the law.


GS

[Lootman]

Sorry to resurrect this, but I don't think that's right. Surely the distinction between joint-tenancy and tenants-in-common has no bearing on IHT liability, for obvious reasons. Can someone better qualified than me confirm or refute, please?

You are correct in theory. What can happen in practice, however, is that without a property transfer there may be no need for probate, and then any IHT liability is swept under the carpet, as it were.

It is still owed but never determined. It is usually probate that triggers the determination of IHT.

In the not-very-contrived case of two siblings owning a £1,000,000 house under joint tenancy, each having £15,000 in an ISA, each willing everything to the other, and one of them dying, what would a solicitor advise the survivor? Don't bother applying for probate to access the ISA, because it is dwarfed by the IHT saving?

I'm guessing not, but it's a genuine question.

A solicitor is first and foremost an officer of the court. So will never advise lying, fraud or any illegal act. If only because they could lose their license if they are caught.

I wasn't condoning or recommending it either. Just pointing out that it happens, particularly in cases where assets are owned jointly and so pass to the other tenant without probate or outside of probate. And I doubt that all cases of that happening are captured.

[PinkDalek]

Licence.