Introduction

If you are disposing of a property and need to consider Capital Gains Tax, you may be asked to establish a property’s value for a particular date or purpose.

Where an independent professional valuation is required, it is important to instruct a suitably qualified valuer and explain the tax circumstances at the outset.

Why might a valuation be needed?

A valuation may be relevant where the tax calculation requires a market value rather than simply relying on the price originally paid or the eventual sale price.

The exact tax treatment depends on the circumstances and should be confirmed with your accountant or tax adviser.

The valuation date matters

Property values change over time. A valuation prepared for a historic date is therefore different from a current market appraisal. For Capital Gains Tax, the property is typically valued as at the date of disposal/transfer. If you are selling, gifting or transferring the property, the precise date of this transfer would need to be used as the date of valuation.

The valuer needs to understand the relevant valuation date and the purpose of the report so that appropriate market evidence can be considered.

What does the valuer consider?

The valuer considers the property and relevant market evidence. Factors can include location, size, accommodation, condition, construction, alterations, development potential where relevant and comparable evidence.

For a historic valuation, evidence from the relevant period may be particularly important.

Why use a professional valuation?

An online estimate or estate agent appraisal is not usually suitable where a formal independent valuation is required for tax purposes.

An RICS Registered Valuer working within the applicable valuation standards can provide a professional report for the stated purpose.

What information should you provide?

Give the valuer as much relevant information as possible, including the property address, ownership circumstances, relevant dates, details of alterations and any documents that may assist.

Your accountant or tax adviser can help identify the information that needs to be established for the tax calculation.

What the valuation does not do

A property valuation is not a detailed building survey. Cockrams’ valuation service involves a property inspection, but it is not equivalent to a Level 2 or Level 3 Home Survey.

If you also need detailed information about the physical condition of the property, a separate survey may be appropriate.

Contact us for assistance with your Capital Gains Tax valuation

If you need a property valuation for Capital Gains Tax, establish the required valuation date and purpose before instructing a valuer. Providing the correct background information helps ensure the report is suitable for the required purpose.

Cockrams Surveyors’ Chartered Surveyors and Registered Valuers undertake residential valuations for taxation purposes across Cornwall. Always discuss the tax treatment itself with your accountant or tax adviser.