Probate and CGT

Hi Please could I have some help with the following. My mother passed away in January 2023. She left everything to myself and my three siblings (her children) apart from some money for the 8 grandchildren. Myself and one my siblings are executors of the will. We applied for probate which was granted in November 2023. When applying for probate the calculations came back that there was no IHT to pay. The estate is an expected estate as the value is below the current IHT threshold and the estate is worth less than £650000 and any unused threshold was being transferred for my father who passed away in 2005 and left everything to my mother. (This was indicated on the form but I was not requested to fill in any form for this). When estimating the value of the property a local estate agent estimated £340,000. This is what we used for probate purposes along with a small amount of money that my mother had. In April 2024 we decided to sell the house and put it on the market. The same estate agent came back and said that she may have undervalued it last time she was there and said that it had a value of £400000. This makes quite a difference to that of the probate value. My concern is that when the property sells, there will quite a difference between the probate value and the value it sells for. This will incur quite a bit of CGT on the difference which would not have happed if the first valuation was correct. Should I apply to probate to have the valuation changed? My other questions are: Do we pay CGT on the whole of the estate (sale of the property, money in bank accounts, sale of car, sale of furniture etc) which would also include money left for the grandchildren, or just the sale of the property? How do I work out how much CGT there is to pay? How do we pay CGT when the time comes that the house is sold and do I (as an executor) report this to HMRC or do all the beneficiaries have to individually report it? Thank you.

Hi,
You would need to apply to the courts to have the probate value amended, based on the new valuation. You would need to inform the Inheritance Tax team of the change, as Inheritance Tax may now be payable.  
The probate value should be used to calculate any Capital Gains Tax due and any tax due should be reported and paid within 60 days of the completion date, to avoid penalites.  
If the probate value is amended after this submission, you should submit an amended calculation based on the new value and claim a repayment of tax. There is guidance which advises how to report and pay any tax due, and a calculator here:
Tax when you sell property
Thank you.