Death and Taxes Part 2
HM Revenue & Customs are spending money in trying to increase the amount of inheritance tax they are receiving each year. As usual, the emphasis does not appear to be on the really wealthy, many of whom have in place sophisticated schemes to eliminate or minimise the tax. Rather the target appears to be those estates where the main residence has, according to HMRC, been undervalued.
This highlights the danger for those who have decided to deal with parents’ probate themselves. There is a tendency to place a low value on the home with no evidence to back it up. A trusted probate service is more likely to ensure that robust valuations are obtained so that any objections to a value from HMRC can be successfully challenged.
If a property is undervalued by £40,000 this could result in an additional £16,000 tax and on top of that there could be substantial penalties. DIY can often turn out to be a false economy.