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Inheritance tax on property

time limits

My wife has inherited a part share of a run down block of flats. It has been put to the other joint owners that they should be sold. There is damp in the flats and they overlook land that has had foundations laid nearly ten years ago but now overrun with Japanese knot weed etc. The fire escape steps are in poor condition and very rusty and the concrete walkway on first floor is cracking and is supported by 6 concrete posts. A market valuation has been done on the flats as if they are in a good state and it is possible the flats will sell for less than half that value. What is the time limit to have the IHT value reduced to the actual sale price? There is difficulty in getting all the other joint owners to agree to a sale.

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22nd Oct 2017 09:08

It's three years, but the relief you are talking about can be claimed only by the "appropriate person". Normally that's the executors. If your wife has already inherited, it may be too late - you don't provide enough detail to comment.

There is the obvious question: why was the valuation done that way?

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to Tax Dragon
25th Oct 2017 10:42

Yes my wife has already inherited the property, which is part of a larger portfolio, but HMRC are now doing a compliance check on the IHT return and looking into all the valuations. I think they are looking at increasing the valuation of these flats which were valued by the property agents, I believe he is a retired surveyor, who manage the flats and collect all the rents. Half the flats are empty because of the damp conditions etc and other tenants are now looking to find somewhere else to live.

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22nd Oct 2017 09:14

I see a lot of property valuations. Often they value on the basis of what the property would be worth after dilapidations have been rectified, but then go on to give an estimate of the cost of rectification works. Does yours do that?

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to johngroganjga
25th Oct 2017 10:36

johngroganjga wrote:

I see a lot of property valuations. Often they value on the basis of what the property would be worth after dilapidations have been rectified, but then go on to give an estimate of the cost of rectification works. Does yours do that?

Yes it does but in my opinion it doesn't go far enough. Because of the land, which was sold to the local council, is locked in it would mean any purchaser would be seeking to knock down the flats and the run down warehouse next door. It would effectively reduce the price of a sale, in my opinion, to under half the valuation.
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