Red Book valuations prepared for capital gains tax, both current and retrospective. They cover March 1982 and April 2015 rebasing, are reported for professional reliance, and are negotiated with HMRC and the District Valuer where the figure is queried.
Capital gains tax turns on two numbers: what an asset was worth when it was acquired, and what it is worth when it is sold or given away. Where either of those is not a simple purchase price (an inherited property, a gift, an asset held for decades, or a part-disposal), the figure has to be valued, and HMRC will test it. We prepare those valuations to the RICS Red Book, with the evidence and reasoning that let your accountant rely on them and that hold up if the District Valuer asks questions.
We act for individuals, trustees, companies and the accountants advising them, on residential and commercial property across London, Surrey, Hertfordshire, Sussex and the wider South East.
A valuation is required whenever a gain has to be computed without a clean arm’s length price at one or both ends: a property received by gift or inheritance, a transfer between connected parties, a part-disposal, a change of use, or the apportionment between exempt and chargeable periods on a property that was not always a main residence. Getting the figure right protects you from over-paying and from a later enquiry.
For capital gains tax, value means market value, defined by s.272 TCGA 1992 as the price the asset might reasonably be expected to fetch on a sale in the open market. That statutory test maps directly onto the Market Value basis in the RICS Valuation – Global Standards (the Red Book), so a compliant report speaks to exactly the standard HMRC applies. Where a property changes hands other than at arm’s length (a gift, or a transfer between connected persons under s.18 TCGA 1992), s.17 deems the disposal to take place at market value regardless of what, if anything, actually passed between the parties. It is that deemed figure that has to be valued, and that HMRC’s District Valuer will test.
Two dates get confused, and only one of them is the valuation date. Under s.28 TCGA 1992 a disposal made under a contract takes place when the contract is made, not when it completes, and where the contract is conditional the disposal happens when the condition is satisfied. A valuation prepared for a disposal therefore speaks to the contract date. A valuation prepared to fix an acquisition cost speaks to the date the property was bought, gifted or inherited, or to 31 March 1982 or 6 April 2015 where rebasing applies.
The reporting clock runs from somewhere else entirely. Under Schedule 2 to the Finance Act 2019, a UK resident disposing of UK residential property on which capital gains tax is due must report and pay within 60 days of completion (60 days for completions on or after 27 October 2021, 30 days before that), and a non-resident must report a disposal of UK land within the same 60 days whether or not there is tax to pay. That is a short window for a figure that has to be evidenced rather than estimated, which is why it pays to commission the valuation when the sale is agreed instead of after it completes. Your accountant files the return; we provide the figure it rests on.
Selling part of a garden, granting a lease out of a freehold, or disposing of a share in a property is a part-disposal. Under s.42 TCGA 1992 the allowable cost is apportioned by the fraction A / (A + B), where A is the consideration for the part disposed of and B is the market value of the part retained. The retained interest therefore has to be valued before the gain can be computed at all. An over- or under-stated B feeds straight through to the tax. We value both sides of the apportionment on a consistent basis so the computation holds together.
Valuation also decides whether a small part disposal escapes the charge at the time. Under s.242 TCGA 1992, where land is transferred for consideration of no more than one fifth of the market value of the holding as it stood immediately before the transfer, and no more than £20,000, and the taxpayer’s land disposal proceeds for the tax year are within the same £20,000 ceiling, a claim can be made for the transfer not to be treated as a disposal, the consideration being deducted from the allowable cost of the land retained instead. Both limbs have to be satisfied, and the first cannot be tested at all without a market value for the whole holding. It is a relief that turns on a valuation, and it is worth establishing the position before the transfer is agreed rather than after.
Where a property was your main residence for only part of the ownership period (or part of it was let, or used for business), private residence relief under ss.222–223 TCGA 1992 shelters a proportion of the gain. Getting that proportion right often depends on valuing the property at the point its use changed, or valuing a distinct part of it, rather than applying a simple time-apportionment. We provide the figures the relief calculation needs.
For assets held since before 31 March 1982, the gain is generally computed from the property’s value on that date rather than its original cost, ‘rebasing’ to 1982 under s.35 TCGA 1992. Establishing a reliable 1982 value decades after the event is precise, evidence-driven work, and it is exactly the kind of retrospective valuation HMRC scrutinises closely. We build the figure from contemporary evidence and document it so it withstands that scrutiny. I have written separately on how a property is valued as at a past date, the dates that matter, and the no-hindsight rule that governs the work.
When non-resident capital gains tax was extended to UK residential property from 6 April 2015, owners were generally able to rebase to the property’s value on that date, so that only the gain accruing after April 2015 is charged. A similar rebasing applies to UK commercial property and indirect holdings brought into charge from April 2019. Establishing a robust April 2015 value is central to computing the gain correctly, and we prepare it on the same evidenced, defensible basis.
HMRC refers CGT property figures to the District Valuer in the same way it does for inheritance tax. Where the DV queries a valuation (current or retrospective), we handle the negotiation, defend the figure on its evidence, and resolve the difference. Because the valuation is built for exactly that test from the outset, the discussion stays on firm ground. We have written separately on what a District Valuer referral actually involves, and a retrospective CGT case in Bromley shows how an evidenced figure holds up in practice.
A valuation does not have to wait for an enquiry to be tested. Once the disposal has taken place, HMRC will check a proposed capital gains valuation ahead of the return through a post-transaction valuation check, applied for on form CG34. The application has to reach HMRC at least three months before the filing date for the return it relates to, and it is only available after the event: HMRC does not give pre-transaction valuations. Where the figure is agreed, HMRC will not afterwards challenge its use in that return unless something material was left undisclosed.
It is not a way of buying time, and a check that has not yet come back is no reason to file late. Where the route suits the matter, we prepare the valuation and the supporting evidence in the form the check calls for, and take up the figure with the Valuation Office Agency if it is queried.
Every valuation is director-led, reported for professional reliance, and prepared to be useful to your accountant first and persuasive to HMRC second. Fees are agreed in advance, and we are glad to talk through a matter with you or your adviser before any formal instruction so the basis and date of valuation are right from the start.
Whenever the gain cannot be worked out from a straightforward purchase and sale price: a gifted or inherited property, a transfer to a connected person, a part-disposal, or where only part of the ownership period qualifies for private residence relief. In those cases HMRC expects a professional valuation, not an estimate.
For assets owned since before 31 March 1982, the chargeable gain is generally calculated from the value on that date rather than the original cost. We prepare that historic ‘rebased’ value from contemporary evidence so the computation is correct and defensible.
When non-resident CGT on UK residential property began on 6 April 2015, owners could generally rebase to the value on that date, so only the post-2015 growth is taxed. A robust April 2015 valuation is essential to compute the gain, and a parallel April 2019 rebasing applies to commercial property.
The date-of-death value normally becomes the base cost for CGT when a beneficiary later sells. That is why an accurate probate valuation figure matters in both directions, and why, if it was never properly established, we can value retrospectively to fix the base cost before a sale.
A part-disposal (selling off part of a garden, granting a lease, or disposing of a share) is governed by s.42 TCGA 1992. The allowable cost is apportioned using the fraction A / (A + B), where B is the market value of the part you keep. So the interest you retain has to be valued before the gain can be worked out, and we prepare that figure alongside the disposal.
Yes. A gift, or a transfer between connected persons, is treated under s.17–18 TCGA 1992 as taking place at market value, whatever was actually paid. That deemed market value is your acquisition cost, so a Red Book valuation at the date you received the property is what fixes the base cost and protects you if HMRC enquires later.
HMRC refers property valuations to the District Valuer. We negotiate with them directly, defend the figure on its documented evidence, and resolve the difference, the same service we provide on inheritance tax.
For a sale, s.28 TCGA 1992 puts the disposal at the date of the contract rather than completion, so that is the date the valuation speaks to, and a conditional contract is dated from when the condition is satisfied. For an acquisition cost it is the date you bought, were given or inherited the property, or 31 March 1982 or 6 April 2015 where rebasing applies. The 60-day window to report and pay on UK residential property runs from completion instead, which is a separate and much shorter clock.
Yes, once the disposal has happened. A post-transaction valuation check, applied for on form CG34, asks HMRC to review the figure before the return goes in. It has to be submitted at least three months before the filing date, and a figure HMRC agrees will not be challenged later in that return provided everything material was disclosed. We prepare the valuation and the evidence that supports it.
