With the introduction of new taxes on property and the tightening of existing taxation laws, there is an increasing need to supply HMRC with a property tax valuation.

What is a tax valuation?

Unlike other valuations, valuing for tax purposes is based on legislation and supported by RICS guidance notes (UKGN3). Various issues must be considered and assumptions made which can influence the value considerably. As tax is levied directly from the valuation, it is important to ensure a reasoned figure.

Who can submit the valuation?

As HMRC do not specify who should undertake the valuation, the figure can be supplied by:

 - The taxpayer, or personal representative

 - Via an estate agent

 - Via a chartered surveyor

Why is it important to get it right?

When submitted to HMRC the valuation will pass through two levels of scrutiny, first the initial appraisal team, and then the District Valuer (DV). The DV is an independent Agency of Chartered Surveyors instructed by HMRC to assess, and if necessary, negotiate property valuations.

In recent years there have been an increasing number of valuations contested by the DV. Not only can negotiations with the DV take considerable time and efforts; once the valuation is agreed with the DV, HMRC have the power to penalise.

It is therefore important to ensure the valuation provided, whether arrived by the taxpayer or PR, estate agent, or a chartered surveyor, is reasonable.

Why you must use a chartered surveyor?

To undertake a tax valuation, a chartered surveyor must certify his independence, skill and knowledge. He will know the appropriate valuation and reporting requirements to satisfy HMRC and the DV.

With the view to quality and transparency, RICS valuers are also required to:

 - Provide details of the nature and source of the information relied upon

 - Clearly state assumptions made

 - Provide reasons for the valuation and give details of areas of uncertainty or factors that could affect the figure

These requirements aid transparency reducing the risk of the figure being contested.

If however the valuation is contested, the report will be good evidence, and the chartered surveyor will be sufficiently skilled to discuss, negotiate and resolve.

Elysium Surveyors  specialise in tax valuations. Edmund Ellis worked with the DV for a number of years and is therefore uniquely experienced to undertake and resolve tax valuations. For more information contact Elysium Surveyors.