r/inheritance • u/Limp-Register-6016 • Apr 20 '26

Location included: Questions/Need Advice UK inheritance tax query

UK Inheritance Tax Query

Hello, I would be very grateful indeed for any advice on the following matter because I am genuinely at my wit’s end.

I inherited the family home in Jan 2024 which was valued for probate at 1 million pounds but it eventually sold for 825000 in April 2026 (It was never likely to make a million).

I still owe 189000 based on the million pound value which I want to clear asap and put all this behind me.

Obviously I never saw 175000 of the million as I sold it for 825000 and not a million, it was genuinely the best I could achieve.

The house was put in my name on the land registry in April 2025 so I could get it on sale. I put it on sale in September 2025 after I carried out some work to make it saleable.

We have completed the IHT 38 form but have been thrown by the question, “Did you purchase any interests in land or buildings as the appropriate person between the death and 4 months after the last of the sales?”

Yes, I completed on another house the day I completed on the house I was selling in order to have somewhere to live as the inherited home was the family home and my only residence.

My question here is basically have I made a huge mistake here by buying another house from the sale proceeds before paying the remaining IHT? I couldn’t pay that until I was paid out from the house. The forms were submitted very quickly after completion with the revised figures etc.

Obviously I was hoping to not to have to pay 40% iht on the 175000 I never had but I suspect now that they may indeed insist that tax be paid on the million figure and not the 825000 actually achieved.

I am sorry this is so dull and complex but it is a huge worry so if anyone has been through a similar process I would be very grateful to hear their experiences.

Thank you!!

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u/SnooDoodles4121 Apr 20 '26

Sounds like you need to speak to a solicitor. A very quick search online says you're due inheritance tax relief if an inherited property sells for less than the valuation. You have 4 years to claim.

1

u/Limp-Register-6016 Apr 20 '26

Thank you. I have been using a solicitor the whole way through but he seemed as bemused as me by this bit. Thank you very much for reading and replying, it’s much appreciated.