Inheritance tax manual - Appendix 19 : Appeal Reports : Guidance Notes for cases involving claims for Agricultural Relief

Previous PageSection ContentsNext Page

Appendix 19 : Appeal Reports : Guidance Notes for cases involving claims for Agricultural Relief

All Text Amended

1. Introduction

Appeal Reports should only be completed in those cases where negotiations have become dead-locked and the CTO has indicated that a determination is warranted (see Section 27 Part 4).

It must be borne in mind that, on receipt of an appeal report from the DV, the CTO will, in all probability, serve a Notice of Determination on the parties and, provided that an appeal is received against it, the papers will then be passed to the Inland Revenue Solicitor in order to make a reference to either the Lands Tribunal or the Special Commissioners, as appropriate. DVs must, therefore, ensure that any valuation reported to the CTO at this stage is genuinely defendable and must also, as far as possible, satisfy themselves as to the accuracy of any information which is to be cited in support of this valuation.

2. Completion of Appeal Report

Listed below are headings which will normally be included in an appeal report where a claim for Agricultural Relief under Section 116 IHTA, as amended, has been made.

It is impossible to cover all circumstances in a list of this sort and DV's must feel free to add additional relevant material as appropriate.

All submissions must be in duplicate.

Suggested Headings

  • DV's reference

This should include the Group Office name, the location where the case is being dealt with and the case reference number.

  • CTO's reference
  • Name of transferor/deceased/settlement
  • Details of the taxable occasion(s) and date(s) of valuation(s)

These details should be the same as on the original instructing Form VOA 1/VOA 2 or equivalent.

  • Address

State the full address of the property concerned. In multi-property cases, only the addresses of those properties where there is a dispute regarding one or more of the following factors should be provided:-

a. what was occupied for the purposes of agriculture, and/or

b. what qualifies as agricultural property, and/or

c. the values.

  • Interests to be valued

Details should be provided of all the beneficial interests in the properties, eg. FHVP, including tenancies granted and held, grazing rights granted and held, grazing and/or mowing licences granted, and the purposes of occupation for which the tenancies have been granted, eg. farm employee, non-agricultural residential tenant, pony paddock tenant, etc. Where any details are in dispute (e.g. whether a tenancy was protected by the Agricultural Holdings Act 1986, or other legislation) these should be stated.

Details of any known restrictive covenants, easements, etc., which affect value, should be provided. If none is known to exist, this should be stated.

  • Inspection

A statement regarding inspections with dates should be provided and, if the inspection was external only, an explanation as to why no internal inspection was made.

It is important in the event that a claim for Business Relief (which is often not made when papers are first supplied by the parties to the CTO) that a note is made of any accommodation which is used exclusively for any business purpose, whether that business be agricultural or non-agricultural, eg. a farm office.

  • Description

Full details of the location, description, construction, accommodation, condition and area of the property, together with details of access and public services should be provided. This should include, where appropriate, the farmhouses, cottages, farm buildings (traditional, modern), woodland, land (its quality and MAFF gradings) and the nature and extent of any grazing rights. Plans clearly identifying the property and, wherever possible, photographs (particularly of dwellings and other buildings) should be attached as separate exhibits and should be referred to at paragraph 30 below.

  • Planning

Details of any planning provisions affecting the property should be provided, including copies of any relevant documents. Details of agricultural occupancy planning restrictions should be set out. If planning matters are in dispute, the respective assumptions and conclusions drawn by both sides should be outlined.

  • History of ownership and occupation

A history of the ownership and occupation of the estate from the date of the transferor/ deceased`s acquisition of it to the date of his/her making a lifetime transfer/death can be helpful background information. It should comprise particulars of land, buildings and dwellings held at the date of acquisition, details of any subsequent acquisitions and/or disposals by the transferor/deceased made prior to the lifetime transfer/death. It would also be of interest to know to what purposes the land, buildings and dwellings have been put since the date of the lifetime transfer/death.

  • Extent of the property for character appropriate purposes

The extent of "the property" for character appropriate purposes in respect of particular farmhouses, cottages and farm buildings within the estate should be stated. If it is in dispute, eg. the parties are having regard to land let away in respect of in-hand dwellings and buildings, details of the respective points of view should be provided.

  • Occupation for the purposes of agriculture

a. Identify those elements which were occupied for the purposes of agriculture;

b. Identify those elements which were not occupied for the purposes of agriculture, giving reasons.

  • Parties` views of what was occupied for the purposes of agriculture

Should the parties dispute what was occupied for the purposes of agriculture, provide details of their opinions and supporting arguments.

  • DV`s comments on parties` views of what was occupied for the purposes of agriculture

Include any observations on points of principle.

  • Qualifying agricultural property

a. Identify those elements which qualify as agricultural property;

b. Identify those elements which do not qualify as agricultural property, giving reasons including evidence of local practice and assessment of financial support.

  • Comparables of local practice

What is required is evidence of similar holdings at or about the date of transfer/death which were occupied primarily for agricultural, rather than for residential of other purposes. Such evidence will not be confined to, or even mostly, sales.

  • Parties` views of what qualifies as agricultural property

Should the parties dispute what qualifies as agricultural property, provide details of their opinions and supporting arguments.

  • DV`s comments on parties views of what qualifies as agricultural property

Include any observations on points of principle and comments on their evidence of local practice.

  • Business Relief

Provide details of elements which may qualify for Business Relief, giving reasons.

  • Parties` views of what qualifies for Business Relief

Should the parties dispute what qualifies for Business Relief, provide details of their opinions and supporting arguments.

  • DV`s comments on parties` views of what qualifies for Business Relief

Include any observations on points of principle.

  • Comparables

Details of the DV's comparables and their analysis should be included here. An explanation of the conclusions drawn should be provided. It should also be stated whether the comparables have been inspected (usually externally) and, if not, why not.

  • Details of DV's opinions of open market values and/or apportionments

A full explanation of the valuation should be provided, including reasons for particular values per hectare/acre or yield adopted, etc.

  • Details of DV`s opinions of agricultural values and/or apportionments

A full explanation of the valuation should be provided, including reasons for particular values per hectare/acre or yield adopted, etc.

  • Details of parties' opinions of open market values and/or apportionments
  • Details of parties` opinions of agricultural values and/or apportionments
  • DV's comments on parties` opinions of values/apportionments

Detailed comments and criticisms of the parties' valuation should be provided here, including the relevance or otherwise of any comparables they have cited.

  • Items in dispute

All aspects which have not been agreed should be listed here, e.g. valuation of entirety, appropriate discount for undivided share, and an outline of the respective arguments should be given, including reference to any case law quoted.

  • DV`s observations

This paragraph should include an objective summary of the merits of the respective cases and should highlight any strengths and weaknesses in both the DV's and the parties' cases.

  • Plans and photographs (if available)

All enclosures with the report should be listed here.

  • DV affirmation

The affirmation by the DV is confirmation that the procedure contained in Section 27 has been followed in each case where an Appeal Report is required. In all disputed cases the DV (or report signatory) should personally review the matter in accordance with Section 27 para 27.51. If the DV concludes that the report does satisfy para 27.51, the following endorsement should be inserted:-

"I have reviewed this case and am satisfied that the approach to the valuation is correct in principle and in law.

I am also satisfied that there is sufficient evidence available to adequately support this opinion of value, subject to any necessary consents being forthcoming."

The report should then be signed and dated.

  • CEO endorsement

Here, the appropriate CEO Technical Adviser will insert their conclusions as to the merits of the case in accordance with Section 27 para. 27.52.

Previous PageSection ContentsNext Page