Sale of property

[tax999]

Hi, i am dealing with a peppery in Scotland.

I had a formal valuation for a property done, sent this along to HMRC and paid inheritance tax due. HMRC never queried the value of the property.

The property then sold for £5000 more than the Confirmation value.

Do I require to pay further inheritance tax on this gain? My understanding is that inheritance tax is paid on the date of death value.

[jerome.lane]

The extra £5k should just be taxed as a capital gain as it is either just what a more willing buyer was happy to pay over probate value or an increase since valuation date.

[tax999]

Thank you. That was my understanding too.

Would the same apply for personal items such as jewellery?

[jerome.lane]

Potentially, although personal chattels are often exempt from CGT. Non-wasting chattels are CGT exempt if the sale proceeds are less than £6,000. Where the chattel sells for more than £6,000, you should do two calculations – one based on the actual cost (probate value) and the other based on five-thirds of the proceeds less £6,000. The lower amount is your taxable gain. Easy peasy!

[tax999]

Thanks so much for your help.

With the sale of jewellery, if sold for more than Confirmation value does this require to be reported to HMRC?