Connected Party Valuation

The definition is found in Section 286 of TCGA 1992 and Section 1122 of CTA 2010 (which are substantially the same). Connected persons include: (a) your spouse or civil partner (unless separated under a court order or deed of separation); (b) your relatives — brothers, sisters, ancestors (parents, grandparents) and lineal descendants (children, grandchildren); (c) the spouses or civil partners of your relatives; (d) business partners and their spouses and relatives; (e) a company you control (alone or with connected persons); (f) trustees of a settlement of which you are the settlor; and (g) trustees of a settlement and any person connected with the settlor. The definition also catches connections through companies — two companies are connected if the same person (or group of connected persons) controls both. If you are unsure whether the parties are connected, your solicitor or accountant can advise — or we can work with them to determine the correct basis for the valuation.

Yes. Even though the child pays nothing (or a nominal amount), the transaction is treated as a disposal by you at market value for CGT purposes — and you may have a CGT liability even though you received no cash. The child, as transferee, may have an SDLT liability based on the market value (if the value exceeds the SDLT threshold). And for inheritance tax purposes, the gift is a potentially exempt transfer (PET) at the market value. A formal RICS Red Book valuation provides the evidence: (a) you need for your CGT calculation; (b) the child needs for the SDLT return; and (c) your executors will need if the gift is within 7 years of death and becomes chargeable to IHT. Without a proper valuation, HMRC may challenge the figures — and the burden of proof is on the taxpayer.

The valuation methodology is the same — both value the property on the basis of market value. The difference lies in the purpose and the report content. A connected party valuation specifically: (a) identifies the statutory provisions under which the market value is required (TCGA 1992 and CTA 2010); (b) confirms that the parties are connected, so the market value rule applies; (c) states that the valuation has been prepared on the assumption of an arm's-length transaction between unconnected parties; and (d) is prepared with HMRC scrutiny in mind — with full disclosure of the evidence and reasoning. A standard market valuation does not address these statutory requirements and may not satisfy HMRC if the transaction is investigated.

One RICS Red Book valuation will typically cover both SDLT and CGT, provided the valuation date is the same (the date of the transfer). Both taxes use market value as the basis, and both apply the same connected party definition. The one report establishes the market value for all purposes — SDLT on the transferee, CGT on the transferor, and IHT (if applicable). However, you should confirm with your accountant or solicitor that a single valuation is sufficient for your specific transaction.

Yes, spouses and civil partners are connected persons for both CGT and SDLT purposes — unless they are separated under a court order or a formal deed of separation (in which case they are not connected). However, transfers between spouses who are living together benefit from the spouse exemption for CGT — meaning no CGT is payable on the transfer. SDLT may still be payable, depending on the value and whether any mortgage debt is being transferred. If you are transferring property to your spouse or civil partner, we can provide a market valuation — but your accountant or solicitor should advise on whether a formal Red Book valuation is necessary given the availability of the spouse exemption.

The cost depends on the property type, size and location. We provide a fixed-price quote within 24 hours of your enquiry — the price we quote is the price you pay, with no hidden extras and no VAT added to our fees. The cost should be considered alongside the potential tax liabilities and the risk of HMRC challenge if the market value is not properly evidenced. An HMRC enquiry into a property valuation can be time-consuming, stressful and expensive — a properly prepared Red Book valuation at the outset provides the best protection. We cover all seven counties: Bedfordshire, Buckinghamshire, Cambridgeshire, Hertfordshire, Northamptonshire, Greater London and Oxfordshire.

We aim to inspect the property within 5–10 working days of receiving your instruction. Once the inspection is complete, the valuation report is delivered by email within 5–7 working days. If the transaction is time-sensitive — for example, because a mortgage offer is expiring or a tax deadline is approaching — please let us know at the outset and we will do our best to accommodate your timescale.

Yes. When trustees distribute property to a beneficiary (a transfer in specie), the transaction is between connected persons — the trustees and the beneficiary are connected under the TCGA 1992 rules. The trustees are deemed to dispose of the property at market value for CGT purposes, and the beneficiary acquires it at market value for CGT base-cost purposes. SDLT may also be chargeable. Our valuation provides the market value evidence needed for the trustees' CGT calculation, the beneficiary's SDLT return (if applicable), and the trust's IHT reporting (if relevant). We are experienced in dealing with trustees and their professional advisers and understand the sensitivity and complexity of trust property transactions.