Probate market value uplift

[simpsonite]

Hi All,

My client bought a farm back in 1997 which was in her sole name - I have the land & farmhouse valuations at that time.

She married in 2004 and the farm was put into joint names with her husband.

Her husband died in 2010 ( I have probate value for the farm). The farm was then reverted back to 100% ownership by the wife.

My client is now selling the farm to her son.


For the purposes of my CGT comps -

My client is querying whether she should get a 2010 mv uplift at probate for the farm.

My feeling is no as the transactions have been between husband and wife.

Her CGT comp base cost is simply the 1997 valuation.

Some large numbers involved so I want to eliminate any shred of doubt.

Thoughts much appreciated,

Simpsonite

[simpsonite]

I would also add that the farm house was not habitable in 1997. It has been valued at £15,000

She renovated the farm house and was able to move in Oct 99.

My client has not retained the renovation invoices!!
Would HMRC accept a surveyor valuation report of the property at Oct 99 when the renovation works were completed in order for me to allocate the enhancement /renovation costs.
So if the property were valued at say £30,000 at Oct 99 , I could therefore allocate £15,000 as relating to the renovation work.

[jerome.lane]

Your client is correct, her base cost will broadly be 50% of the original purchase price plus 50% of the 2010 probate value.
If it's a working farm, then there may be hold over claim in point.

[jerome.lane]

I've just seen your update and yes, HMRC should accept a just and reasonable calculation of the enhancement costs, especially if supported by before and after photos (a tall order sometimes I know). There's also an element of PPR and maybe even lettings relief?

[simpsonite]

Your client is correct, her base cost will broadly be 50% of the original purchase price plus 50% of the 2010 probate value.
If it's a working farm, then there may be hold over claim in point.

So the fact she acquired the half share back from her husband at probate in 2010 will not affect her having 50% mv uplift at that time?

Your input regarding reasonable calculation of the enhancement costs is also noted.

Thank you

[simpsonite]

Your client is correct, her base cost will broadly be 50% of the original purchase price plus 50% of the 2010 probate value.
If it's a working farm, then there may be hold over claim in point.

Hold over relief available on the farm land & outbuildings but it would not apply to the remaining gain after PPR relief on the farmhouse