How are houses valued for Inheritance Tax?
My house is a bungalow with six acres of land in rural mid-Wales. The land is scrubby grassland, outside development limits. It is only suitable for family ponies, or for growing hay, worth about £300 per year. There are no similar properties within several miles. Houses here take many months to several years to sell, because there are very few potential buyers.
A similar-sized house a quarter of a mile away, with 2.4 acres of woodland, has been on the market for £450,000 for almost a year. The bungalow next door to mine, of similar design but smaller, with no land, has been on the market for about six months at £200,000. I paid £230,000 for my house, in 2003, so that according to Nationwide's House Price Calculator, it is now worth £337,700. However, I paid over-the-odds because two of us happened to be interested in the house at the same time, and I had money to spare, with no other use for it.
The price obtained here depends a lot on how long one is prepared to hold out until a buyer comes along.
My house will not be sold on my death, because my daughter will be moving into it.
I could claim that with the land worth £3,000 an acre, it would probably not fetch £200,000. If the right buyer came along wanting a property on which to keep ponies, then it might make £350,000 to £400,000.
A speculator might offer say £1,000,000 in the hope of getting planning permission for a wind turbine or a solar farm, or getting the land brought within the Development Limits in the next Local Development Plan.
How will HMRC decide on its value for InheritanceTax?
My house is a bungalow with six acres of land in rural mid-Wales. The land is scrubby grassland, outside development limits. It is only suitable for family ponies, or for growing hay, worth about £300 per year. There are no similar properties within several miles. Houses here take many months to several years to sell, because there are very few potential buyers.
A similar-sized house a quarter of a mile away, with 2.4 acres of woodland, has been on the market for £450,000 for almost a year. The bungalow next door to mine, of similar design but smaller, with no land, has been on the market for about six months at £200,000. I paid £230,000 for my house, in 2003, so that according to Nationwide's House Price Calculator, it is now worth £337,700. However, I paid over-the-odds because two of us happened to be interested in the house at the same time, and I had money to spare, with no other use for it.
The price obtained here depends a lot on how long one is prepared to hold out until a buyer comes along.
My house will not be sold on my death, because my daughter will be moving into it.
I could claim that with the land worth £3,000 an acre, it would probably not fetch £200,000. If the right buyer came along wanting a property on which to keep ponies, then it might make £350,000 to £400,000.
A speculator might offer say £1,000,000 in the hope of getting planning permission for a wind turbine or a solar farm, or getting the land brought within the Development Limits in the next Local Development Plan.
How will HMRC decide on its value for InheritanceTax?