Capital Gains & Other Taxes Manual - Section 12 - ATED : Part 3 : Case Procedures - PRBC Cases

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12.30 Introduction

12.31 HMRC Request

12.32 Further Information Required

12.33 Inspections

12.34 Reliefs

12.35 Valuation Report

12.36 Urgent Cases

12.37 Negotiations

12.38-12.39 Reserved

Part 3 – Case Procedures – PRBC Cases

12.30 Introduction

The purpose of the PRBC service is, if possible, to give taxpayers who may be unsure about their proposed valuation some certainty before they submit their ATED tax return.

Taxpayers might want some certainty where a property is valued at an amount close to one of the ATED value band thresholds. This is so they can agree which ATED band the property falls into, or whether it falls outside the tax as it is deemed to be under the £2 million threshold. The PRBC service is only available to customers if:

  • they are not due a relief that will reduce the ATED charge to nil, and
  • the value the taxpayer has placed on the property falls within 10 per cent of a banding threshold

A taxpayer may therefore only request a PRBC if their valuation of the property is between the ranges shown below:

  • £1.8 million - £2.2 million
  • £4.5 million - £5.5 million
  • £9 million - £11 million
  • £18 million - £22 million

The aim of the PRBC service is to confirm, based on the information provided, whether the banding proposed by the taxpayer is acceptable (rather than the specific valuation of the property).

All PRBC requests must be sent by the taxpayer to HMRC. If HMRC consider that a PRBC is appropriate they will then request advice from the VOA.

12.31 HMRC Request

If based on the information provided in HMRC’s request for advice;

  • there is insufficient information to identify the property, or
  • it is clear that the taxpayer’s valuation of the property does not fall within the ranges specified in paragraph 12.30 above,

HMRC should be advised as soon as possible and no further action should be taken on the

request until further information or clarification is received from HMRC. If a case has been opened and (b) above applies the case should be cancelled as soon as possible.

If advice is still required, HMRC will resubmit the request with all the papers attached to the SVT Newcastle inbox. If the further information or clarification is received by a caseworker direct from HMRC the caseworker should forward the e-mail to the SVT Newcastle inbox.

On receipt of the further information or clarification from HMRC SVT Newcastle will register a new case (credit type 01).

12.32 Further Information Required

On receipt of a PRBC case, the caseworker should as soon as possible consider whether there is sufficient information available to provide advice on the relevant valuation band or whether further essential information is required. The caseworker should consider the information provided by the taxpayer and office records.

Where information is lacking the caseworker should, whenever possible, make any assumptions that seem reasonable and unlikely to give rise to substantial error in valuation. There should be no direct contact with the taxpayer or their agent. Where the information provided is insufficient to make a judgement on the relevant value band then the caseworker should notify HMRC within 20 working days of receipt of the case, specifying the information required and requesting HMRC to obtain it from the taxpayer. The case should be reported on CRAC within 20 working days of receipt.

If the information is received from the taxpayer HMRC will forward the information provided to the VOA. On receipt of the information a new case (credit type 01) should be opened and the valuation should be considered in accordance with the procedures in this Part.

12.33 Inspections

PRBC cases should on first reference be considered on the basis of the information provided by the taxpayer and any office records. An inspection should not therefore be carried out in any first reference (credit type 01) PRBC case.

12.34 Reliefs

At the time of any PRBC request the taxpayer will not have established any claim for relief. If

the taxpayer considers that the whole property is due a relief that will reduce the ATED charge to

nil then no PRBC request can be made.

However, in some cases the taxpayer may not include part of a property in their valuation because

they consider that a relief is due in respect of that part (e.g. part of the property is let to a third

party on a commercial basis and is not, at any time, occupied, or available for occupation by

anyone connected with the owner). Any advice on a PRBC request is based on the

information provided by the taxpayer and this must be made clear in the report. If it

subsequently transpires that HMRC do not accept that the taxpayer was entitled to relief in

respect of the part excluded from the valuation then the PRBC advice will be null and void.

12.35 Valuation Report

If no further essential information is required, the caseworker should decide on the basis of the information provided by the taxpayer, together with any knowledge of the property and office records, whether or not the proposed banding may be accepted.

If the taxpayer's proposed banding can be accepted HMRC should be advised accordingly and the report endorsed ‘as returned’.

If the taxpayer's proposed banding cannot be accepted then the caseworker should report accordingly and notify HMRC of the value band that is considered to be applicable. The report should be endorsed as ‘not negotiated’ and also explain the reasons why the valuation submitted by the taxpayer cannot be accepted. The report should also clearly state that the opinion is based on the information provided by the taxpayer (for example, if part of the property has been excluded from the valuation because the taxpayer considers that a relief is due).

The report should normally be sent to HMRC by gsi e-mail (see paragraph 12.25 above).

12.36 Urgent Cases

Taxpayers are encouraged to submit any PRBC request as early as possible because if they do not leave enough time for HMRC/VOA to consider their PRBC request, or further information is required, then it may not be possible to give the taxpayer a decision before the date they need to send in their ATED return. If cases are received near the ATED filing date they should be treated as urgent and every effort should be made to give taxpayers a decision before the date they need to send in their ATED return.

However, if it is not possible to give a taxpayer a decision before the filing date then HMRC’s advice is that if a taxpayer thinks they may need to pay ATED then they should submit a return along with the appropriate payment of tax. By doing this the taxpayer can avoid accruing interest or becoming liable for a penalty for sending the return late. Taxpayers are advised to submit their ATED return based on the banding they think is appropriate.  If the VOA subsequently advise that the taxpayer’s proposed banding is not acceptable HMRC may then open an enquiry into the taxpayer’s return to enable further consideration of the valuation.

12.37 Negotiations

If after being notified that the VOA are unable to accept their proposed banding the taxpayer advises HMRC that they wish to discuss the valuation with the VOA then, if there is still sufficient time before the ATED filing date, HMRC will request the VOA to open negotiations with the taxpayer to endeavour to agree the appropriate banding.

On receipt of such a request the case should be re-opened as a referred back (03 credit type) case. The caseworker should then follow the same procedures as for a post-return assurance check case (see Part 4 below).

If it is not possible to conclude negotiations before the ATED filing date then the taxpayer will need to proceed as indicated in paragraph 12.36 above.

12.38-12.39 Reserved

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