Capital Gains & Other Taxes Manual - Section 6 - Part 2 : Requests from Inspectors

Previous PageSection ContentsNext Page

On this page

Reference of Cases

6.11 Routing

6.12 Properties within more than one DV Unit or Group area

6.13 Land Portfolio Valuation Unit (LPVU)

6.14 References on CG20

6.15 Information to be provided by the Inspector

6.16 References by Memorandum

6.17 References from Inland Revenue, Capital Taxes, Shares Valuation (SV)

Liaison with Inspectors

6.18 On Receipt of Case

6.19 Acknowledgements

6.20 General Liaison

Valuations to be Referred

6.21 De Minimis Limits

Part 2 : Requests from Inspectors

Reference of Cases

6.11 Routing

Requests for valuation advice will normally be sent to the Group office within which the property is located.

The DV may make local arrangements for cases to be sent direct by an Inspector where the latter agrees and where such an arrangement will improve efficiency (for example, where the Inspector and the Group office share the same office building).

6.12 Properties within more than one DV Unit or Group area

There are several situations in which these circumstances may arise. These are:

1) The Inspector may submit a request to one Group but attach a schedule which includes properties in another Group area but still within the same DV Unit.

DV's may decide on the arrangements to deal with these references within the Unit. For registration purposes however a case should be created for each reference falling within each group boundary. This will provide consistency with the current charging methods and statistical information.

2) The request includes properties within a different Unit.

The original receiving group should send copies of the papers to the appropriate Unit location and the Inspector advised of the action taken. Any necessary liaison with other DV Units should be undertaken before a report is issued or an opinion of value is put to the taxpayer.

3) Where a taxpayer regularly makes a large number of disposals each year they may be included in the CGT Multiple Land Valuation Scheme, details of which are at para 6.132.

4) Cases concerning the valuation of unusual interests may sometimes be co-ordinated by CEO from whom ad hoc instructions will be issued.

6.13 Land Portfolio Valuation Unit (LPVU)

Taxpayers who make over 30 disposals requiring 31 March 1982 valuations in one tax year may be included in the 'Multiple Land Valuation Scheme'. For the purposes of these procedures requests received from the LPVU should be treated as requests from Inspectors and registered in the same way as set out in para 6.12.i.

Further information about the LPVU is set out in para 6.132 et seq.

6.14 References on CG20

The requesting Inspector will indicate on Form CG20, with a copy of CG34 in PTVC cases, the type of valuation advice required ie:

  • a 'not negotiated' valuation or apportionment (see Part 3) or
  • an 'agreed' valuation or apportionment (see Part 4).

However for registration purposes all initial requests should be treated as seeking a not negotiated valuation. Where cases are subsequently converted into Negotiation cases the CRAC record should be corrected.

6.15 Information to be provided by the Inspector

Wherever possible the Inspector will provide the following information:-

1) the name of the taxpayer and any agent;

2) address of the property to be valued together with a location plan if this assists identification;

3) details of the transaction giving rise to the request;

4) details of the taxpayer's interest in the property and any known lettings;

5) in the case of apportionments, details of the parts of the property between which an apportionment is required;

6) the valuation or apportionment put forward by the taxpayer, together with copies of any professional valuations;

7) a copy of the CGT computation. This information will probably not be available for PTVC requests.

6.16 References by Memorandum

In addition to any valuations referred on Form CG20 Inspectors may require other advice to enable them to compute a taxpayer's CGT liability. Requests for other advice will usually be made by memorandum and may include:-

1) requests concerning development value - The Inspector may request the DV to advise, for the purposes of para 9 Sch 2 Taxation of Chargeable Gains Act 1992, whether the consideration for a disposal reflects development value (see paras 6.141 et seq)

2) requests for apportionments - The Inspector may also request the apportionment of an acquisition price where the land disposed of was acquired with other land, or the apportionment of the consideration for a disposal where part only of the land is entitled to relief or exemption. (See Section 8 for requests concerning identification of the permitted area and apportionments for private residence relief)

3) requests concerning expenditure on improvements - The Inspector may ask for a valuation ignoring any enhancement in value resulting from expenditure on certain improvements. This is needed when para 16(5) Sch 2 TCGA 1992 applies.

DVs should ensure that the Inspector provides an adequate description of the improvements to be ignored. In giving a valuation in such cases the DV should stress that the valuation is on a notionally unimproved basis and should set out precisely the improvements which have been ignored. In all other respects the normal procedures should be followed.

6.17 References from Inland Revenue, Capital Taxes, Shares Valuation (SV)

References from SV for valuations for CGT purposes may arise in one of two ways:

1) When SV have been requested by the Inspector to value unquoted shares in a company they may need valuations of property owned by the company. Requests for such valuations will be made on a form Val 63 and should be dealt with in accordance with the procedures set out in Chapter 1B, Section 16, which applies to all unquoted share references from SV.

2) In cases involving the disposal of certain specialised properties (such as hotels, restaurants, residential nursing homes, public houses, cinemas, theatres, bingo clubs, gaming clubs, petrol filling stations and other types of leisure property) where both the business and the property have been sold or transferred, the Inspector will initially refer the papers to SV. The purpose of this procedure is to enable SV to review the papers and, if a separate valuation has been returned in respect of any goodwill, to endeavour to agree whether or not there is any transferable 'free' goodwill which comprises a separate asset. Requests for any valuations required in these cases will be made by SV in memo form and should be dealt with in accordance with the procedures set out in this Section.

Liaison with Inspectors

6.18 On Receipt of Case

On receipt of a CGT reference from an Inspector (whether on CG20 or by memorandum) DV’s should ensure that the valuation or apportionment request is clearly understood. If not, the reference should be returned to the Inspector within 14 days with a request for clarification and the case cancelled.

Whenever possible minor errors or omissions should be resolved by discussion with the Inspector.

6.19 Acknowledgements

All initial requests for valuation advice should be acknowledged within 5 working days of receipt and the Inspector advised of the name of the caseworker, their location, and telephone number.

6.20 General Liaison

In addition to the formal progress reports to Inspectors DVs are encouraged to maintain informal contact as good customer care. Where cases are proving difficult to settle a discussion with the Inspector may produce a solution.

Valuations to be Referred

6.21 De Minimis Limits

Inspectors instructions require them to refer all valuations of land and buildings to the DV except valuations as at 31 March 1982 for indexation or rebasing where the interest is freehold and:-

  • the disposal takes place at arms length or is not between connected persons and
  • the valuation does not exceed the lower of £15,000 or 25% of the disposal proceeds.

Previous PageSection ContentsNext Page