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D M Morris; J Gregson (TC4098)
The owner of a farm died in January 2005. Two of his four sisters were appointed executors.
The farm was valued at the date of his death at £650 000 but it qualified for agricultural property relief meaning it was below the inheritance tax threshold. The property was sold in 2006 for £800 000. The executors claimed capital losses on the sale claiming the sale proceeds of the farm should be substituted for the probate value.
HMRC refused and the matter was referred to the district valuer who valued the farm at £740 000 at the date of death and stated the amount was accepted by the executors and beneficiaries.
The Revenue negotiated a settlement for tax interest and penalties in May 2010 on the basis of this valuation.
The sum was agreed and paid by the executors who complained to the taxman...
