FORMAL VALUATIONS – INHERITANCE TAX

We often get asked about valuation work and the types of work we get involved with which is relatively wide ranging in that we can, and do, value urban and rural property for a variety of purposes.  One of these is taxation and estate administration and our latest valuation is a good example of how we can provide such reports and follow up to support the client and their solicitors during the process.

We were recently instructed by a firm of Worcester based solicitors to undertake a formal valuation as part of the administration of an estate (application for a grant of probate).  The property was a semi-detached residential dwelling in Worcester City.  It had already been valued by another firm; however, the valuation had been challenged by the Valuation Office Agency (VOA).  Upon instruction we requested not to be told the values in question so that we could undertake the valuation without any influence or “aim” as to where either party wanted it to be.

The valuation was backdated to the date of death (2020) the property was in poor condition and subject to a tenancy agreement.  We had to estimate costs for reinstatement works allowing for the potential condition at the valuation date as well as the implication of the tenancy agreement following our initial site visit.  We compiled the report and it was sent to the VOA.  The VOA did not accept the valuation, however, immediately removed around £10,000 from their proposed figure.

We were asked by our clients solicitor to respond further to the (very limited) evidence of the VOA which involved covering matters such as a change in plot size since the initial purpose (the last value shown on the land registry) and its impact upon value, the property market over time and our estimates as to the cost of the work required which any reasonable purchaser (in an arm’s length transaction in accordance with the definition of Market Value) would take into account in considering a value/purchase price.

We also specifically looked up the properties referenced by the VOA as comparable evidence and were able to outline why the property prices were different in comparison to that which we were valuing.  This information was presented in a follow up letter to justify our valuation and was sent back to the VOA via our client’s solicitors.  The VOA then accepted our original valuation within twenty four hours of our follow up letter.  This has resulted in a valuation being accepted which was several thousand pounds below that initially proposed by the VOA.

This case is a great example of how we work with clients and solicitors to provide estate administration valuations for use as part of a grant of probate/taxation but also the importance, and value, of being able to fully substantiate any valuation provided if follow up advice is required.  The outcome in this case has saved the estate several thousand pounds in inheritance tax due.

If you, or your clients, need formal (Red Book) valuations undertaken by an RICS Registered Valuer please do get in touch and we can discuss your requirements and send over fee quotes as required.  We operate clear fixed fee quotes for the preparation of valuation reports and can also offer differing levels of service including rapid/next day for more urgent work where required.