Nick Pope

Registered with Property118.com
Sunday 18th August 2013


Latest Comments

Total Number of Property118 Comments: 159

Nick Pope

12:12 PM, 18th January 2020
About 11 months ago

Do I pay CGT if I sell to a friend at minimum value

Bear in mind also that Stamp Duty Land Tax would be payable - the amount your friend actually pays doesn't matter, the tax is payable on the value at the time of transfer. If a price appears to be artificially low the matter will be referred to the DIstrict Valuer's office.... Read More

Nick Pope

14:21 PM, 4th January 2020
About 11 months ago

Real cost of borrowing for a deposit

Reply to the comment left by The Forever Tenant at 03/01/2020 - 12:13
That's a great idea!... Read More

Nick Pope

16:17 PM, 21st December 2019
About 12 months ago

Can I contract that any new tenant provides their own reference?

I had this scenario arise recently where a tenant left and the remaining tenants found another to take over. He seemed OK but as the old references were very good and the remaining 3 could cover the rent easily I simply reminded them that they were jointly and severally liable for the rent so if the new guy did not pay it was their responsibility. A few days later they sent me a credit reference on the new tenant that they had got and paid for - result.... Read More

Nick Pope

10:57 AM, 5th December 2019
About A year ago

Valuation Mystique?

Reply to the comment left by David Price at 05/12/2019 - 10:12
Which is why I put a little caveat in the first paragraph and advised contacting a local surveyor.... Read More

Nick Pope

9:42 AM, 5th December 2019
About A year ago

Valuation Mystique?

This question has come at an opportune moment as I am dealing with a similar situation. Please note that I am a chartered surveyor but you should not take any of my comments as advice as situations vary.
I am assuming that the overall estate is large enough to fall into the Inheritance Tax net. If not, then the value is academic if no tax is due. Just remember that if no tax is due and you intend to keep the property then the value agreed for IHT will form the basis for Capital Gains Tax when you sell so it can sometimes be useful to try to push up the value. IHT is currently 40% and CGT is 28%.
The valuation of properties for IHT purposes is based on "the value at any time of any property shall for the purposes of this Act be the price which the property might reasonably be expected to fetch if sold in the open market at that time."
The Valuation Officer (VO), acting on behalf of HMRC will consider the property in all its aspects and is permitted to have regard to all the circumstances. Thus if the property has a very large garden in a built-up area he will look at the possibility of obtaining planning permission and add an element for hope value. If the house next door has just got permission to build in its garden then hope is likely to be a very high percentage of the value of the building plot.
In this case, the VO has suggested that the property is worth more as a single house. That is an acceptable argument based on the legislation but it should be borne in mind that planning permission and building regulation approvals will be required and if it's a semi there will have to be Party Wall Act negotiations with the neighbour(s) and all this will take time and money resulting in a discount on the final value when it's a house again.
You mention that your sister owns both properties and the freehold. The leases are short and the flats would be difficult to mortgage as many lenders want 80+ years remaining but as she owns the freehold she can easily grant new long leases to herself though at 57 years the leases should be reviewed and brought up to date. Once again there is cost and time to be considered.
Are the properties let? If so then your sister cannot obtain vacant possession until the leases end. The value is calculated at the date of death. In the case I am dealing with a new 12 month lease was entered into 3 weeks before the owner died (not by design I must add) and hence the house is not available until October 2020 and the rent was all paid in advance so this will obviously affect saleability and value not least because it will be very difficult to get a mortgage as most offers are time limited. In addition a private occupier probably won't wait that long and a BTL landlord will have similar issues because no rent will be receivable until the same time. I am hoping that the VO will agree to a 12.5% reduction but I'll settle for 10%.
I have mentioned a number of factors above and there may be others which will affect value. There is an estate agent valuation available on the case I am dealing with which takes no account of the factors above and is at £60,000 above what I hope to agree with the VO. That's a saving of £24,000 in tax.
On that basis you might like to consider getting a local chartered surveyor to advise on value and if necessary negotiate with the VO. It will cost you a fee but may save you much more in tax.... Read More