Do I have to pay inheritance tax on my late father's house?

Question

My father died recently and I need to sell his house.  It has been valued for probate at £350,000.  Does this mean I will have to pay inheritance tax?  If I do have to pay inheritance tax what would happen if the property were sold for more than £350,000?  Would I need to inform anyone?

Answer

As your father’s house is worth more than £275,000 you will have to pay inheritance tax.  The rate is 40 per cent.  Inheritance tax is based on the value of the house at the time of the person’s death.  So if the estate agent valued the property at £350,000 this should be its genuine value.  If you are concerned about this you could ask another estate agent to do a valuation, to give you a price comparison. 

If your property is sold for more than £350,000 there will not usually be any additional tax payable as the property prices in the area could have risen since the initial valuation at the time of your father’s death.

Published by Ctizens Advice April 2005

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