From: Ronald Raygun 
Subject: Re: Q on inheritance tax
Newsgroups: uk.finance
Date: Wed, 29 Mar 2006 08:37:23 GMT

Tumbleweed wrote:

> Just been looking at the website, amazingly it says;
> 
> The full market value of any house owned by the deceased should be shown
>  >>>>although a professional valuation is not normally required<<<< (my
> emphasis).

Ah but, what *is* FMV?  It is what the deceased would have been able
to get for it, on the open market, i.e. at arm's length, on the day he
died, had he not died.

That, surely, must mean the net proceeds after deduction of selling
expenses.

> How are you meant to know the FMV without getting a professional
> valuation?

An actual open market sale is a pretty good way of establishing FMV.
What you get is what it's worth.

> Looks like a situation designed to encourage fraud. What a
> bizzarre govt we have.
> I suppose the obvious thing to do is to get a valuation, then look on the
> land registry and value it by comparison, then choose the lower value.
> After all, any difference must be down to the work done on it, and the
> elapsed time?

If a house is sold more or less straight away, you don't need a valuation
at date of death because it will be presumed (barring exceptional
circumstances) that in a short time the value does not change appreciably.

Hence the value at death either is the same as the actual sale proceeds,
or can be back-calculated from the sale proceeds by reference to local
house price indices on the dates of sale and of death.