Capital Gains Tax; Getting a hoarders house valued for probate.

[Hamsternautss]

Hello. My dad passed away last month with no will. He wasn't married or seeing anyone and I am the only child so should inherit his house.

His house would probably be worth around 150k (similar sized house sold for this in November) if it didn't need so much doing to it. It needs full renovations, it has no central heating and probably needs rewiring. My dad had also turned into a hoarder (his late mother's stuff, plus for some reason he had started hoarding hundreds/thousands beer bottles, wine boxes and wrappers of a certain food. His entire spare room is floor to ceiling with wine boxes.) There is also a rodent infestation going on.

I applied for letters of administration 3 weeks ago and gave a rough estimate of about 100k property value plus other money he had. I knew his estate wouldn't be over inheritance tax threshold though. I sent off his death certificate last week.

Do I need to now get his house professionally valued by an estate agent to prove its value? Not sure how this will work as inside my dad's house is just completely shocking. It's really in a bad way, not sure I could get them to come in with the mice problem.

I read that if the house value increases from the date my dad died Vs when I eventually sell it I might have to pay capital gains tax? Does this mean if I spent any of my own money doing the property up or just getting it reasonably decent/central heating for when I sold it on I might lose the money I spent on it by having to spend capital gains tax too if it increases its value?

I want to do probate myself as my dad never remarried and I'm his only daughter buy I don't quite understand capital gains tax!

[prh47bridge]

If the estate is below the inheritance tax threshold you almost certainly only need to send an estimate of the value. See "When to send full details of the estate’s value even if no tax is due" on www.gov.uk/valuing-estate-of-someone-who-died/check-type-of-estate for details of situations where you will need a proper valuation.

Yes, you will have to pay CGT on any increase in the value of the property before you sell it. You can deduct your annual CGT allowance and any allowable expenses from the profit you make on the sale. Allowable expenses include money you spend improving the property but not money you spend on maintenance. Decorations and repairs count as maintenance so are not allowable. Fitting central heating is an improvement, so would be allowable against CGT. You may need to take professional advice to confirm how much of what you are doing is allowable against CGT.

[70kid]

There is a form on HMRC where you can do an online calculation and if you Google CGT calculator you will be able to find calculators that can give you a rough idea

I am in the process of doing this atm but because my mums half was in a trust when she died it’s a different allowance and percentage - from my calculations I don’t have to pay any but I’m using an accountant to do it for me

I think ( but not sure ) your personal allowance for CGT is 12k or thereabouts
again I think but not sure 😂
if when he died it was worth 100k and now when you sale it’s worth 110 k you wouldn’t pay any CGT because of your personal 12 k CGT allowance:

if it was worth 115k now you would pay a percentage of CGT on the amount over 112
so a percentage of 3k I think it’s 20 percent so on 3k CGT you would pay £600 ( i think)
but you can deduct any solicitors / estate agent fees & possibly clearance fees of the amount
if you did improvements you can deduct that as well - there is a list of what they say is improvement -
so general painting / decorating no
but putting in new windows GCH a conservatory - yes

I think you only have 30 or 60 days from when the property is sold to get the forms filled out

if he has just died get 3 estate agents in to give you a value as it is right now no matter what the condition is
keep copy’s of this and maybe ask the estate agents to say it’s this price because it needs 50k of work
when you eventually sale you will be able to work out the rough capital gains

[TizerorFizz]

I would honestly pay for a house clearance first. You cannot expect anyone to value it as it is. You will just have to pay for it. You then need to ascertain if it’s worth doing any improvements at all. DH inherited a run down house but it was too far away to deal with improvements and cost outweighed profit. So we sold it. You must get it cleared and deal with the mice though.

[70kid]

I also had to do a house clearance and a garden clearance
cost around 1k for a 2.5 terrace house with beds sofas chairs and household stuff
and £600 for the garden

[TizerorFizz]

As DH sold immediately CGT wasn’t an issue. It’s only really an issue if it’s your second property. If you live in rented it could be your main property if you live in it after it’s done up.