Hi there,
I would really appreciate some advice on a capital gains tax issue my wife has.
4 years ago my wife and her sister inherited a flat off of their late parents. It was already rented out so there was no immediate need to sell it. For probate valuation my wifes sister asked an estate agent to value the property and the price came back at 110k (which seemed low), which is what was used for inheritance tax purposes (this sill left a lot of headroom on inheritance tax allowance).
A local developer has now offered my wife and her sister a very good price for the flat and agreed to pay the capital gains tax. Which we have worked out as being taxable on his offer of 250k minus the 110k that was put down on the probate documentation. The developer is now arguing that this is wrong as the land registry shows it was transferred into my wife's name for 175K
We're now baffled as to why this is different and which price we should be using as a baseline for working out CGT. We think the original valuation was probably way too low.
The developer has stated that he will not pay the CGT on the 110k valuation as it is too much and not accurate
I'd appreciate any advice you can offer - thanks!!
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