Valuations for Tax Purposes
There are a number of reasons why you or a client may require a Property Valuation for Tax Purposes. These include Annual Tax on Enveloped Dwellings (ATED), Capital Gains Tax (CGT), Inheritance Tax/Probate, Stamp Duty Land Tax, Corporation Tax and Income Tax.
Appointing a skilled Chartered Surveyor and Registered Valuer is crucial to these valuations and you are more likely to avoid the inconvenience and expense of an HMRC challenge as there is much less likelihood for them to investigate a valuation prepared by a Chartered Surveyor and Registered Valuer. In their own words: "HMRC will be able to enquire into returns and challenge valuations but they will normally be able to accept valuations prepared by a professional property Valuer."
Copping Joyce Surveyors provide comprehensive valuation reports for tax purposes with detailed descriptions, photographs and explanation of the methodology adopted. The report will help the Inland Revenue and the Valuation Office Agency to understand the rationale of our valuation and accept the figures reported.
As surveyors, we provide valuations that confirm the market value of property a given date to assist you in calculating the tax due for capital gains made on property sales or transfers.
We can provide historical market value valuations in the following situations related to property:
- Gifts – Date of gift
- Assets sold for less than worth to help the buyer – Date of sale
- Inherited assets where you do not know the inheritance tax value – Date of death
- Assets owned before April 1982 – 31st March 1982
You will need to report and pay tax if the taxable gains are above the capital gains tax allowance.
If your total gains are less than the tax free allowance, you will still need to report your gains in your tax return if both of the following apply:
- The total amount you sold the assets for was more than 4 times your allowance
- You’re registered for self-assessment
Inheritance tax is applicable at this time and is usually taken care of by the estate of the person who has died.
An accurate capital gains tax valuation could help you reduce your tax contributions by thousands of pounds.
You need to complete an ATED tax return if your property is:
- owned or partly owned by a company, partnership or collective investment scheme.
- a dwelling (when all or part of the property is used, or could be used as a residence, for example a house or flat and includes any gardens, grounds and buildings within the property) in the UK
- is valued at more than £500,000 on the 1st April 2017 (or at a later purchase date)
If you are unsure wether you fall into ATED brackets, please contact our Valuations team for advice.
We therefore value properties at this date if owned on or before that date.
- For properties owned on or before 1st April 2017, the valuation date is 1st April 2017.
- For properties owned AFTER 1st April 2017, the valuation date is the date that you acquired the property
If you have been named the Executor or Administrator of an estate, you need to be given a ‘grant of representation’ – i.e. be granted ‘probate’ – to have the legal right to pass on or sell their assets as directed in the person’s will.
One of the first criteria of being granted probate is to provide an accurate valuation of the estate, which includes the deceased person’s property, belongings and cash, minus any debts.
This will help HMRC work out if Inheritance Tax is due on the estate and, if so, how much. Inherited properties can only be sold once probate has been granted.
- Initial advice in respect of capital the valuation
- Inspection of the property
- Reporting the Market Value at the applicable valuation date
- Negotiating with HMRC should they raise any queries regarding the value provided (Please note that this element could incur additional costs depending on the level of work required but this will be confirmed with you before any costs are incurred. )
- Consultation prior to the valuation to ensure any specific concerns you have are considered in the inspection