Property Valuations for Tax Advisers

Yes. HMRC's own published guidance recognises RICS Red Book valuations as the appropriate form of professional valuation evidence for tax purposes. A Red Book valuation is produced by a RICS Registered Valuer in accordance with the mandatory RICS Valuation Professional Standards, known as the Red Book. When a valuation is challenged, HMRC's District Valuer will themselves apply Red Book methodology. Providing a Red Book valuation with the return demonstrates that the taxpayer has taken reasonable care with the valuation, which can be a complete defence to certain penalties if HMRC subsequently argues the figure is wrong.

Yes, retrospective valuations are a routine part of our practice. For CGT purposes, we commonly value properties as at the date of acquisition, the date of disposal, or at 31 March 1982 for pre 1982 holdings. For IHT, we value as at the date of death or the date of a lifetime transfer. For divorce settlements, we value as at the date of separation or the date of the financial order. We research market conditions, comparable transactions and relevant property price indices for the specific valuation date and apply the same Red Book methodology as for a current market valuation.

Our standard delivery is within 5 working days of the property inspection, and the inspection itself is usually completed within 3 to 5 working days of instruction. Where a filing deadline is imminent, we can often accommodate an expedited schedule and deliver the report within 72 hours of instruction. Always tell us the deadline at the point of enquiry so we can confirm what is achievable.

A desktop valuation relies on publicly available data, photographs, floor plans and automated valuation models without the valuer visiting the property. It can be suitable for some purposes at the lower end of the value spectrum where the property is standard and the tax at stake is modest. However, HMRC guidance indicates that an internal and external inspection is the expected standard for tax valuations, particularly where the value is material. An inspected valuation captures condition, layout, aspect, quality and any factors that affect value that would not be apparent from a desktop review. We always recommend an inspected valuation for tax purposes unless the specific circumstances make a desktop approach proportionate.

For a full Red Book valuation, yes. An internal and external inspection is the standard that HMRC expects and that the RICS Red Book requires for most valuation purposes. The inspection allows the valuer to assess condition, layout, specification, natural light, outlook and any factors that positively or negatively affect value. If access is not possible, for example where the property has been sold, we can sometimes provide a restricted valuation based on external inspection and available data, but this comes with a caveat and may carry less weight with HMRC. We will advise on the appropriate approach when you provide the circumstances.

The treatment depends on the tax in question. For CGT, professional valuation fees are generally an allowable incidental cost of disposal that can be deducted in calculating the gain. For IHT on death estates, the valuation fee is typically deductible as an administration expense of the estate. For lifetime transfers, the position may differ depending on who bears the cost. As you are the tax adviser, you will determine the appropriate treatment for your client's specific circumstances, but the report will be invoiced in a way that supports whichever treatment applies.