Probate value higher than the sale price?
It's common, especially when prices fall or a house needs work after a long period empty. If Inheritance Tax was paid, the estate may be able to claim some of it back.
Why probate values end up too high
- Local prices fell between the death and the sale.
- The property needed repairs, or deteriorated while empty.
- The valuation was optimistic, or based on a stronger market.
- A quick sale was needed, for example to pay debts or tax.
What to check first
- Was Inheritance Tax paid? If not, there is nothing to reclaim.
- Who sold it? It needs to have been the executors, not a beneficiary.
- When? Within 4 years of the death.
- Any other sales? List every sale of land or buildings in that period; gains reduce losses.
- The deadline: the claim must be made within 7 years of the death in practice.
Don't re-value, reclaim
You don't need a new valuation. The claim simply substitutes the actual sale price, which is strong evidence of value, on HMRC form IHT38. HMRC can check that the sale was at a fair price.
Want to know if the estate qualifies? Answer four quick questions and see an estimate in about a minute. No obligation, and nothing to pay unless HMRC refunds.
Check in 1 minuteQuestions
Should we have sold for less on purpose to get tax back?
No. HMRC checks that the sale was at the best price reasonably obtainable and can reject or reduce a claim if it wasn't.
We used a lower probate value than the sale price. Is that a problem?
If a property sells for more than its probate value, HMRC may ask whether the original value was too low. Take advice if the difference is large.