My father died in 2018 and, as per his will, the family farm, which consisted of the family home plus two separate plots of land, including my grandmother’s cottage, was to go to my mother.
However, because of my mother’s age, 86 at the time, the solicitor advised, to save my mother the expense, that land transfers through the Land Registry need not take place until my mother died. He left instructions as to how everything was to be allocated following my mother’s death, which occurred in 2021. However, other circumstances required that valuations on the properties be obtained in 2018.
My question arises because the value of my portion of the property, ie my grandmother’s cottage, was valued at a different figure in 2018 and in 2021, when I had it revalued following my mother’s death – there was an approximate increase in value of €15,000-€30,000. Because of other complications and a backlog with the Land Registry, the property has not yet come into my possession, but when it does I wish to sell it. Which valuation am I obliged to use? The property valuation when my father died in 2018 or when my mother died in 2021?
In this case, a spouse inheriting from a spouse (ie your mother from your father) does not give rise to any inheritance tax. She did not dispose of the property inherited in her lifetime and therefore no CGT arises for her.
You then inherited assets from your mother on her death in 2021, and so it is the valuation on her death that needs to be considered. For inheritance tax purposes, it is the valuation at the valuation date that is relevant. The valuation date is generally the date of probate.
[ Can a forgotten child claim an inheritance when his father dies?Opens in new window ]
The base cost for CGT can be different from the valuation used for inheritance tax. In calculating CGT on a future disposal, it is the valuation at the date of your mother’s death that is allowed as a base cost in calculating the gain. Where there is a long delay between the date of death and the valuation date, these valuations can differ.
Suzanne O’Neill is a tax partner at RSM Ireland
Do you have a query? Email propertyquestions@irishtimes.com
This column is a readers’ service. The content of the Property Clinic is provided for general information only. It is not intended as advice on which readers should rely. Professional or specialist advice should be obtained before persons take or refrain from any action on the basis of the content. The Irish Times and it contributors will not be liable for any loss or damage arising from reliance on any content
