Reasonable Expenses

[Jo L F]

My mother died after an accident that left a heavily bloodstained carpet in her house. Can the cost of replacing the carpet (she did not have accidental damage on her contents policy) count as a reasonable expense? If so, in which box on IHT 400 do I include it? We had a quote to replace the carpet prior to her death, but have still not replaced it (after 2 months), but proabably need to before selling the house. Thanks

[Incredulum]

I guess the value of the house at death is reduced by the damage to the carpet (or indeed potentially a rather greater sum, your average housebuyer being what he is).

[pqtaxation]

I suggest that in this situation there is no effect on your mother's IHT account (IHT400 and supporting forms).

If the carpet had not been so damaged as to make it without value, the carpet would a possible fitting to be sold with the house (if the purchaser wished to buy it) and you (or your surveyor) would make an estimate of how much that value might be (given its condition and probability of being bought)so as to include it in household goods on IHT407.

But in the circumstances you describe the purchaser would not do so and so the carpet would be excluded from IHT407 as, at the time of her death, it had neither any value nor was the subject of an insurance claim.

If after your mother’s death you, as her executor, decided to replace the carpet to make the house more saleable then that cost would be a capital purchase by the estate and its subsequent sale as a fitting in the house would usually be at neither a gain nor loss. No effect on IHT account

Alternatively if you, as executor, decided to remove the carpet to scrap it the cost of doing that comes within house clearance costs that are accounted for as a cost of estate administration and also not within the IHT account.