Pictured above: Louise Igoe
Family members who look to save money through do-it-yourself
probate valuations could instead find themselves severely out of
pocket, a Warwickshire lawyer has warned.
Louise Igoe, a partner in the private client department at
Lodders Solicitors in Stratford-upon-Avon, cautioned that HM
Revenue & Customs was beginning to adopt a stricter line.
Her comments follow official figures which showed that HMRC
challenged 9,368 probate valuations last year, raising an extra
£70 million of Inheritance Tax charges.
Where a challenge was brought, the resulting revaluation raised
the house's estimated value by an average of £24,600.
Mrs Igoe said problems tended to arise where the personal
representatives failed to seek professional advice from a qualified
independent valuer or did not instruct the valuer properly for
example, by failing to adviser the valuer of development
potential.
While some feel it is prudent to get more than one valuation,
Mrs Igoe said HMRC had indicated that this wasn't always necessary
provided that the valuer was instructed correctly and advised of
any specific features, which may include planning permission.
She said: "Opting for the DIY approach may save you some money
but if you get it wrong it could cost a great deal more.
"Indeed, you are best advised to get the professionals involved
for anything other than the most simplistic of cases."
Mrs Igoe said: "Potential beneficiaries of the estate may also
find themselves tempted to undervalue a property for probate
purposes. They think the taxman won't notice and sometimes HMRC
doesn't. But, if the figure is challenged, as nearly 10,000 were
last year, you will find yourself with a lot of explaining to
do.
"Indeed, if your story is as implausible as the amount you put
forward then you will likely face having to pay both the extra tax
and a fine on top."
Mrs Igoe noted that estates under £325,000 paid no
Inheritance Tax but warned that trying to massage the total to get
it under the threshold is a very risky undertaking.
For more information about Lodders, please visit their website
here: www.lodders.co.uk