Property Valuation Danger for Executors
HMRC is increasingly challenging property valuations when estates are being wound up.
It would seem that many folk undervalue property when preparing the figures for a Grant of Probate. What they don’t realise is that HMRC have direct access to the District Valuers service:
“DVS is the commercial arm of the Valuation Office Agency (VOA) and provide professional property advice across the public sector. We offer a broad range of property-related services, including Strategic Asset Management and Energy and Sustainability services.
We employ around 400 people within DVS and are able to draw on the wider pool of skills, expertise and resources of the VOA. The VOA is one of the largest employers of Chartered Surveyors in the UK and operates from an extensive network of offices, covering the whole of England, Wales and Scotland. This enables us to undertake the largest national instructions as well as smaller local commissions in a cost-effective way.
As we are part of the public sector ourselves we have a unique understanding of the needs of our clients and the financial and regulatory pressures that they face. Our specialist sector teams have extensive experience in central government , regional, local and devolved government, health, transport and infrastructure, environment, emergency services, educational bodies.
We also publish an annual Property Market Report which draws on our wide knowledge and experience to give an independent picture of various property markets across the UK. ”
So if you think you can pull the wool over HMRC’s eyes when it comes to property valuations, you are playing a dangerous game which could result in significant financial penalties. If HMRC consider the undervaluation is careless or deliberate, the extra Inheritance Tax penalty can be very substantial.
The lesson to be drawn from this is to be certain that you can justify any valuation to the HMRC: fairly easy with properties on an estate, but you may well need the services of a qualified valuer if the property concerned is not easily comparable with others.