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It is essential that caseworkers are aware of the interaction of this work with the self assessment procedures that apply to taxpayers, whether individuals or companies (see para 6.2). Care must be taken to ensure that taxpayers who fail to meet their statutory obligations and thereby incur penalties cannot point to the VOA as the cause of that failure.
Individual taxpayers must file their returns either by 30 September after the end of the tax year (if they wish the Revenue to calculate their tax liability) or 31 January (if they wish to calculate the tax liability themselves).
Companies must generally file their tax returns with the Revenue on or before the later of:
- 12 months from the end of the accounting period for which the return is made.
- 3 months from the date of a notice requiring them to deliver a return.
As a company's accounting period is usually one year to a date of its own choosing their is no universal filing date for companies. Inspectors will therefore advise DVs of the final filing date in all PTVC cases.
The standard of CGT time limits of 42 days for a 'not negotiated' (01) valuation and 6 months for an 'agreed' (02 or 03) valuation apply to PTVC cases.
The CG34 guidance notes encourage taxpayers to make request as soon as possible after the disposal and make it clear that in some complex cases it may not be possible to provide an alternative valuation before the filing date of the return.
If the following receipt of a request for a not negotiated valuation is clear that it will not be possible to report a valuation to the Inspector before the filing date (either because the taxpayer has made a late request or exceptionally the 42 day time limit cannot be met) the caseworker should advise the Inspector accordingly. The valuation should however still be considered and a report issued as soon as possible thereafter.
Inspectors will usually initially ask for a 'not negotiated' valuation in all cases. However, if in any case the initial request is for an agreed valuation and it is clear that it will not be possible to notify the taxpayer whether or not the returned valuation can be accepted before the filing date (either because the taxpayer has made a late request or exceptionally the 42 day time limit for notifying the taxpayer of the DV's opinion of value cannot be met) the caseworker should advise the taxpayer accordingly. The valuation should however still be considered and the case progressed in the normal way as soon as possible thereafter.
If negotiations have been commenced (either following the receipt of a request for an greed 02 valuation or an 03 referred back case) and it is clear that agreement will not be reached before the filing date, the caseworker should advise the taxpayer and the Inspector accordingly and then continue with the negotiations in the normal way.
The PTVC service also applies to valuations of unquoted shares undertaken by SV. If SV require a valuation of the company's property they will, in their reference to the DV, advise that the valuation is required in connection with a PTVC and indicate the date by which they require a report. If for any reason it is clear that it will not be possible to report a valuation before the date indicated then SV should be advised as soon as possible.
Apart from the additional actions required in the circumstances described in paragraphs 6.128 & 6.129 above, the normal CGT case procedures set out in this section (or Chapter 1B, section 16, for SV cases) should be followed. However, it should be noted that if it is necessary to enter into negotiations and it does not prove possible to reach agreement, the Inspector will be unable to take any action to have the matter referred to the Lands Tribunal until after the taxpayer has submitted their tax return.
When initially considering any valuation returned by a taxpayer it is important that caseworkers do not strive to achieve small variations in valuation that would reasonably fall within acceptable tolerances.
If the caseworker is satisfied that on the basis of available information the returned figure falls within reasonable valuation tolerances then the taxpayer's valuation should be accepted. What constitutes an acceptable valuation tolerance is a matter for the caseworker to judge depending on the circumstances of each case and the strength of the available evidence.
Where a company disposes of more than 30 properties in a tax year it may ask its Inspector of Taxes to admit them to a valuation scheme which has been running since 1991.
The LPVU considers the types of properties in the request and extracts a sample which is representative of those types. DV's are asked to provide, and negotiate if necessary, the values of the properties sent to them.
Because the next stage, the extrapolation of individual values to the whole portfolio, cannot be undertaken until all the DV's have reported, it is important that DV's advise their opinions of value within the time limits given. This will help to avoid delays in settling cases and in consequence complaints from the taxpayers.
On first reference the DV should consider the returned value(s) and where these are outside a reasonable tolerance for the type of property concerned advise the LPVU of their opinion of value on a not negotiated basis. This opinion should be provided within the standard time scale of 42 calendar days (30 working days).
LPVU will review the portfolio in the light of the values provided and give the Inspector an indication of the possible change in value. Should the Inspector decide that the change is significant the LPVU will be asked to negotiate. At this stage the DV may be asked to agree values but, wherever possible, the LPVU will discuss the overall portfolio valuation with the taxpayer and may achieve a settlement without prejudice to the value of individual properties.
The LPVU has its own registration procedures and charges separately for its services. DV's are required to raise charges locally for any valuation requests that are referred to them by the LPVU.
Requests received from the LPVU which relate to taxable occasions are to be given case type 144 and credit type 01, 02 or 03 as appropriate. They will attract the standard flat rate fees when reported to LPVU.
To enter this scheme, which is being treated as a pilot for two years from March 2000 a company or group of companies must meet the following requirements:
- it includes 30 or more properties held since 31 March 1982 or
- if fewer, the properties held since 31 March 1982 have a current value in excess of £30 million.
Applications for the scheme must be accompanied by full information and 1982 valuations as set out in Appendix 20 which is a copy of a letter that the Inspector will issue to a company making a request for the service.
Requests received from the LPVU relating to this scheme are to be given case type 145 and credit type 01, 02 or 03 as appropriate. They will attract the standard flat-rate fees when reported to LPVU. There is no requirement to complete case costing data
As there is no underlying transaction giving rise to a tax liability it is not possible to initiate any form of disagreement or appeal procedures. Cases will be managed by the LPVU but if it is clear that it may not be possible for the DV to reach agreement, the LPVU should be informed of the position and further instructions awaited. This action must be taken promptly as it is the responsibility of the Inspector to decide if the case should proceed and any delays will reflect adversely on our service.
S.274 TCGA 1992 provides that if IHT is chargeable on a person’s estate and the value of the property has been ‘ascertained’ then that value is to be taken as the market value as at the date of death for CGT purposes.
The Revenue consider that a value is only ascertained if the IR(CT) have used the valuation to arrive at a charge to IHT and the amount of the liability was dependent on valuation.
If the valuation returned on death does not affect the amount of any IHT (for example because 100% Agricultural Relief is applicable) then the value is not regarded as having been ascertained.
If a figure is reported by the taxpayer as being the IHT figure the Inspector will check with IR(CT) whether the value has been ‘ascertained’. If not, or if an apportionment of the ascertained figure is required, then the Inspector may seek the DV’s assistance.
If the value has not been ‘ascertained’ for IHT the Inspector will request the DV to provide a not negotiated valuation as at the date of death of the interest passing to the deceased’s personal representatives. The basis of valuation to be adopted is as set out in s.272 TCGA 1992.
If a value has been ascertained for IHT the Inspector may in some cases require the DV’s apportionment of that figure. This may arise where there is a part disposal and the taxpayer does not wish to apply the statutory part disposal formula or when separate assets have been grouped together for valuation purposes and a single value ascertained for IHT. See also 7.26 regarding the apportionment of value to undivided shares in this circumstance.
Requests for advice under 6.131 or 6.132 above should be dealt with in accordance with the normal case procedures set out in this Section.
Occasionally the chargeable gain on a disposal has to be computed under the rules that existed prior to rebasing (see Section 5). To decide whether a mandatory 1965 valuation is required in such cases, an Inspector may require advice on whether the consideration on disposal reflects ‘development value’.
A request for the DV’s opinion will be made in memorandum form.
The DV should make such enquiries and inspections as are necessary to enable a decision to be made on whether or not ‘development value’ has been realised in the transaction, and advise the Inspector accordingly.
Should the DV require any further information this should be requested from the Inspector, within 14 days of receipt and the case cancelled.
If an internal inspection is considered essential, the DV should make arrangements with the new owner or the occupier but the Inspector should be advised so that he may inform the taxpayer. No information as to the reason for the valuation should be given to any person other than the taxpayer or an “interested person” (see pares 6.59-61).
“Development Value” (referred to in para 6.134 above) should be taken to be realised if the consideration exceeded the “Current Use Value” (CUV) of the property at the time of disposal:-
- “CUV” is defined in para 10(2) of Schedule 2, TCGA 1992, as the market value, of the interest on the assumption that it was (and would continue to be) unlawful to carry out any “material development” other than any material development which had planning permission and had already been begun before the valuation date (but not if it was begun before 18 December 1973);
- “Material development” is defined in para 13 of Schedule 2, TCGA 1992. The prospect of carrying out any non-material development should be reflected in the CUV only to the extent that the market would reflect the value of such prospect, having regard to either any actual planning permission in existence or if it were applied for the likelihood of planning permission being obtained;
- Planning permission has the same meaning as in the Town and Country Planning Act 1990 (in Scotland, the Town and Country Planning (Scotland) Act 1972). In cases where an “outline” planning permission only has been granted the CUV will reflect only such development which has received detailed planning approval and has been commenced before the relevant time, the remaining development covered by the outline planning permission being disregarded. The CUV at any relevant time should exclude not only any value arising from the prospect of obtaining planning permission for material development but also any value arising from an actual grant of planning permission for material development where the development has not been commenced before the time of valuation and any value arising from the prospect of obtaining planning permission for material development.
Any difficulties in determining the CUV in any case should be referred to CEO.
Cases referred under para 6.144 above should be reported within the normal time limits for not negotiated cases.
Where the transaction relates to land including minerals, or licensed property in London, the DV should consult the MV or the RLPV (London) as necessary before complying with a request under para 6.134 above.
Where a request for valuation advice is received in a case where the disposal or part disposal is to an authority possessing compulsory purchase powers and the compensation includes a payment for injurious affection, severance or disturbance (other than a contribution towards fees and legal costs etc) the DV should, in addition to complying with the valuation request provide:-
- the date of Notice to Treat or contract for sale, the date on which the amount of compensation was agreed and the date of entry;
- an apportionment of the total compensation between, as appropriate:
- the value of the interest;
- severance and injurious affection;
- temporary loss of profits;
- damage to goodwill (ie. permanent loss of profits);
- loss on stock;
- loss on plant;
- the total of any other disturbance items.
If this apportionment differs materially from one supplied by the taxpayer, the DV should give comments on the taxpayer’s apportionment and make it clear that no attempt has been made to reconcile the two sets of figures. If unable to provide an apportionment the DV should inform the Inspector accordingly.
Where the land being compulsorily acquired forms part of an asset, the normal part disposal rules will apply. The part of the compensation paid for injurious affection or severance is to be taken as the consideration for a part disposal of an interest in the injured or retained land. The Inspector should be invited to submit a separate Form CG20 in respect of each such item, if a valuation is required.
All cases where it is proposed to raise a charge in respect of a discretionary payment or where the compensation for the land taken has been assessed under Rule 5, s.5, Land Compensation Act 1961 (in Scotland, s.12 Land Compensation (Scotland) Act 1963), should be referred to CEO.
Where on the acquisition of on-licensed premises a suspended licence is retained by the Brewers, the case is, in strictness, a part disposal, the value of the licence forming the “remainder”. However, where the value of a suspended licence is nominal only the sale of the premises to the Acquiring Authority will not usually be treated as a part disposal, and the case should be dealt with in accordance with the above paragraphs as may be appropriate. Normal part disposal rules apply where the value is substantial.