Error in probate date of death valuation?

Hi all, I’ve phoned the HMRC CGT tax office and spoken to the Probate court, and I am still stuck on what’s best to do.

When my mum passed, 2 months ago, I stupidly used the valuation which the mortgage company had provided in a drive-by valuation prior to death (unsure how “prior” to death it was). I thought it seemed reasonable for the area and so used it for probate – £239,000. Probate has been granted and no IHT is due as it’s well under the threshold with a net value of approx. £166,000.

I had a valuation done yesterday with a local estate agent with a view to selling, and they’ve given a valuation of £270,000, which was a shock. I am now worried that the extra £31,000 difference will be seen as an increase in property value between DOD and sale. Even with the increase, there is still no IHT due.

I know that I need to fill in a C4 form to HMRC to amend the estate, but I’m worried now that I’m going to be stung with a CGT bill for the increase, when there probably wouldn’t have been one.

I’ve asked the estate agent if they can give an estimated value at DOD (as it was only a few months ago), and now have this. They are saying it wouldn’t have been much different and would have been valued at £260,000 for probate.

My question is, if I fill in the C4 form to show an increase of £31,000 and attach the email from the agents to show there was an error on the probate DOD valuation, am I still likely to get a CGT bill?

The probate office have advised not to amend probate unless one of the mortgage company or someone else reject it.

Others have told me that C4 isn’t necessary as there was no IHT due, but HMRC said that doesn’t matter and that’s still the right form to use. I know I have to tell them the value the property sold at after it actually goes through so I can’t realistically expect this difference to go unnoticed.

I know that I can use the £3,000 annual allowance, plus sale costs, towards the CGT bill if there ultimately is one, but I’d rather correct the error and there not be a bill for my stupid mistake!

Any help would be hugely appreciated! 🙂

Victoria