Valuation Office Agency
Inheritance Tax (IHT) is the responsibility of HMRC. In matters involving the valuation of land and buildings they will seek specialist advice from the Valuation Office Agency (VOA), an executive agency of HMRC.
The decision to refer any particular property valuation case to the VOA lies with HMRC. Where they do, HMRC will firstly ask the VOA to informally consider the valuation returned on the IHT account by the executor, to assess whether it is fair and reasonable. Informally means considering the valuation in relation to any information provided by HMRC and the data the VOA already hold, for instance survey details and sale prices of the property itself, or those of a similar character and location sold around the same time as the date of death. The VOA will also rely on data it holds for its other statutory purposes, such as that used in its assessment of properties for Council Tax. In most cases the valuation returned is accepted and the executor is unaware that the process has taken place.
In some cases, the VOA will be unable to accept at this informal stage that the valuation returned represents the true market value based on the details available. It may be necessary to clarify some factual information about the nature of the property or the legal interest. At this stage an inspection of the property may be required. This does not mean anything is wrong, simply that more information is needed to reach a conclusion. The executor or an agent acting on their behalf may be asked to provide additional information at this stage to support the valuation returned.
If, having obtained the necessary information, the VOA valuer is of the opinion that a different valuation is appropriate to that returned, they will seek to agree the value with executor or their agent.
In most cases the valuation will be agreed, but if this is not possible the VOA will report to HMRC who will decide on the next steps.
If a valuation cannot be agreed it may be referred on appeal to the Upper Tribunal (Lands Chamber). If non-valuation issues (such as the extent of agricultural property) cannot be agreed the matter may be referred to the First Tier Tribunal (Tax Chamber) for determination. In either instance the VOA caseworker will be instructed to act as an expert witness at any Tribunal hearing.