Valuing backwards:
a property as at a past date.

Most valuations answer the question “what is it worth now?” A retrospective valuation answers a harder one.

What was this property worth on 31 March 1982? On 5 April 2015? On the morning a parent gifted it to a child in 2009? For capital gains tax these are not academic questions. The gain, and therefore the tax, is computed from a value as at a date that has often long since passed, and the figure has to be built from the evidence that existed then rather than the market as it looks today. This is some of the most exacting work a valuer does, and it is work HMRC scrutinises closely precisely because the evidence is thinner and the temptation to use hindsight is real.

I prepare these valuations regularly, for accountants and their clients and for individuals dealing with a disposal directly. This article sets out how a retrospective figure is built, the dates that tend to come up, and what separates a valuation that holds from one that does not.

Why the date is in the past.

Capital gains tax turns on two figures: what an asset was worth when it was acquired, and what it realised when it was sold or given away. Where there is a clean arm’s length purchase price at each end, no valuation is needed. The need arises when one of those numbers is missing or is not a real price at all.

A property received by gift or inheritance never had a purchase price the owner paid. A transfer between connected persons, under s.18 TCGA 1992, is deemed by s.17 to take place at market value whatever actually changed hands. An asset held since before 31 March 1982 is generally taxed from its value on that date rather than its original cost. In each case the acquisition figure is a valuation, and because acquisition came first, that valuation looks back in time. The basis is the same one HMRC applies to any property figure: market value under s.272 TCGA 1992, the price the asset might reasonably be expected to fetch on a sale in the open market, which maps directly onto the Market Value basis in the RICS Valuation – Global Standards (the Red Book).

— The discipline in one line A retrospective valuation is not a guess about the past. It is the past, reconstructed from its own evidence.

The dates that actually matter.

A handful of dates recur. Knowing which one applies is the first decision in any retrospective instruction, because it fixes both the legal basis and the evidence I have to find.

1. 01

   31 March 1982.

   For assets held on that date, the gain is generally computed from their 1982 value rather than original cost, under the rebasing provisions in s.35 TCGA 1992. This is the hardest date to evidence, because it predates the digital record almost entirely, and it is the one that comes up on long-held family homes, farms and investment properties.

2. 02

   5 April 2015.

   When capital gains tax was extended to non-residents disposing of UK residential property from 6 April 2015, owners could generally rebase to the property’s value on 5 April 2015, so that only the gain accruing after that date is charged. A robust April 2015 figure is central to that computation.

3. 03

   5 April 2019.

   The charge was widened again to bring UK commercial property and indirect disposals into scope, with a parallel rebasing to 5 April 2019. The same evidential discipline applies, though the date is recent enough that contemporaneous records are usually still available.

4. 04

   The date of a gift or transfer.

   Where a property was gifted or transferred between connected persons, the deemed market value at that specific date becomes the acquisition cost for the person who received it. That date can be any point in the ownership history, and it is fixed by the facts, not chosen.

5. 05

   The date of death.

   For an inherited property, the probate value normally becomes the CGT base cost when a beneficiary later sells. Where that figure was never properly established, it can be valued retrospectively to the date of death so the base cost rests on evidence rather than an old estimate. This is where retrospective CGT work and probate valuation meet.

The rule that governs the work.

The single principle that defines a retrospective valuation is this: the property is valued as it stood at the valuation date, in the market as it was then, using only the information a buyer and seller could have had at that time. Hindsight is excluded. What the property later sold for, what the area did over the following decade, how the market moved after the date, none of it is admissible. The figure has to reflect the knowledge available on the day, and nothing learned since.

That sounds obvious and is surprisingly easy to breach. A later sale price of the actual property is the most seductive piece of evidence there is, and it is usually the least relevant, because it captures everything that happened after the valuation date. Working backwards from a 2024 sale to a 1982 figure by stripping out index movement is not the same as valuing the property in 1982 on its own evidence, and the difference is exactly what a District Valuer will probe.

The property is also taken in its physical state at the valuation date. If it has since been extended, modernised or split, those changes are stripped out: I value what stood there then, in the condition it was then, with the planning position and tenancies that applied then. The RICS Red Book and its UK National Supplement set the standard the report is written to, and the assumptions about state and date are recorded explicitly so the basis is transparent.

Reconstructing the evidence.

The substance of a retrospective valuation is the evidence, and finding it is the real work. The comparable transactions that would be a phone call away for a current valuation have to be reconstructed from records that were never designed to be consulted forty years later.

Contemporaneous comparable sales.

The strongest evidence is always a set of genuine transactions of similar properties at or close to the valuation date. For recent dates such as 2015 or 2019 these are readily available from Land Registry records. For older dates the search is harder and draws on archived sale particulars, auction results, surveyors’ own historic files and records held locally. A handful of well-matched contemporaneous sales is worth far more than a long list of loosely similar ones.

Published indices, used with care.

Regional and national house price indices that run back to the early 1980s have a role, but a supporting one. They are useful for sense-checking a figure and for adjusting a comparable from a few months either side of the valuation date to the date itself. They are not a substitute for evidence: an index describes the average movement of a whole market, not the value of one specific property, and a valuation built on indexation alone is the first thing a District Valuer will take apart.

The documentary trail.

Old title documents, historic tenancy agreements, planning records and even the original conveyance can establish what the property actually was at the valuation date: its extent, its tenure, whether it was let, and in what condition. On a 1982 valuation, knowing that the property was then a single dwelling rather than the two flats it is today, or was subject to a regulated tenancy since ended, changes the figure entirely.

Where retrospective figures go wrong.

Most weak retrospective valuations fail in one of a few predictable ways, and they are worth naming because each is avoidable.

The first is indexation dressed up as valuation: taking a known later price and deflating it by a house price index to arrive at the historic figure. It produces a number, but not one grounded in the property’s own market, and it does not survive scrutiny. The second is valuing the property in its current state rather than its state at the date, quietly importing the value of an extension or a conversion that did not exist then. The third is silent hindsight, where comparables drawn from after the valuation date, or knowledge of how the area later developed, creep into the reasoning.

A fourth, subtler failure is treating a part-disposal as if the whole had been sold. Where only part of a property is disposed of, the apportionment under s.42 TCGA 1992 turns on the market value of the part retained, which itself may need valuing as at the relevant date. Getting the retrospective figure right but applying it to the wrong interest undoes the work.

— The test it has to pass The question is never “what number can I justify?” It is “what would this property have sold for, on that day, to a buyer who knew only what was knowable then?”

How the District Valuer tests a historic figure.

HMRC refers CGT property valuations to the District Valuer, the Valuation Office Agency surveyor who acts as its expert on property values, in the same way it does for inheritance tax. Retrospective figures attract that referral more readily than current ones, because the thinner evidence base leaves more room for two professionals to reach different views.

When a historic figure is queried, the exchange is a professional one: the DV sets out their view and the comparables behind it, and I set out mine. The valuation that holds is the one whose evidence is closest in nature and date to the subject property, and whose reasoning is transparent about the state of the property and the market on the day. A figure supported by three genuine contemporaneous sales and a clear record of the property’s 1982 condition is defensible. A figure produced by indexing a recent sale is not, and the difference becomes obvious the moment the workings are exchanged. Where agreement cannot be reached, the dispute can be referred to the First-tier Tribunal (Property Chamber), though in practice the great majority settle long before that. A retrospective CGT case in Bromley shows how an evidenced figure holds up under exactly this kind of review.

A note for accountants and their clients.

If you are advising on a disposal that needs a retrospective figure, the most useful thing is to settle the date and the basis early. The acquisition date, whether 1982 rebasing applies, whether the disposal is of the whole or a part, and the property’s state at the relevant date all shape the instruction, and getting them clear at the outset avoids reworking the valuation later.

It is also worth asking whoever prepares the figure how they will evidence it. A retrospective valuation that rests on contemporaneous comparables and a documented view of the property as it then stood is one I can stand behind in front of the District Valuer. One that rests on an index and a recent sale price is not, however confident the number looks on the page.

For the underlying service and the statutory framework in more detail, the capital gains tax valuation page sets out how I approach current and retrospective figures, the rebasing dates, and the negotiation with HMRC and the District Valuer that follows where a figure is challenged.