House valuation for CGT

android-fan

android-fan

android-fan

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Looking to gift a house to my daughter. Not our main residence so will be liable for CGT

Will be some CGT payable but want to minimise as far as possible :-)

The biggest factor is the valuation. I believe I require a valuation for a RICS registered surveyor but could just go off my own valuation and hope HMRC don't flag up an issue. If I do use a registered surveyor are they likely to value differently to an estate agent? I want the lowest possible valuation I can provide as proof to HRMC if required. The property does have issues and requires some modernisation so hopefully that will be taken into account.

Any hints/tips from anyone whose done anything similar or works in the field?

Thanks
 
A RICS surveyor would be better to give a warts and all valuation than an estate agent in my view. If suitably prompted. Estate agents may be hardwired to maximise value in their daily life.
 
Thanks. I spoke to one and hinted at a lower valuation would be in my interests so will you look for faults, they basically said they look for obvious issues only and not go looking for problems.

There have been no sales in last 10 years or in the exact same postcode so a market value based on similar properties will be more difficult.
 
This is certainly not gospel, but we had a valuation for help to buy by a surveyor many years ago and I had no doubt at the time that he was conscious of who was paying him. I think he asked up what price we were expecting him to say!
 
Based on my single experience of getting a RICS valuation done for tax reasons, the valuer seemed to fully understand the nuance of the situation and the figure they arrived at was a fair bit less than the market value estimated by estate agents.
 
Zoopla wil lgive you a rough market value, then I'd take off whatever I could think of to reduce it. I.e. it defo needs a rewire, plumb, roof, new boiler, redec, etc.

Give the buggers as little as you can legally get away with; they'll just waste it designing a new logo anyway...
 
**Apologies I think its SDLT that's not payable ignore below.**

Is the property mortgaged? From what I understand there is no CGT to be paid if the property is unmortgaged. That's not to say when your daughter offloads the property there wont be CGT, though.
 
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Yes, a cursory search suggests you don't have to pay for a professional valuation.

Yes, HMRC will assess the value of the house to check they think it's reasonable. So there's no need to pay for the valuation, just put in what you think is fair and HMRC will challenge it if they don't think it is. I don't know if there is a penalty if you try and lowball them, but I doubt there is. They will have experts though and they weren't born yesterday. ;)
 
If they do check anything, I expect it will just compare it against an AVM (automated valuation model) via API. That's all the banks do for remortgages and product switches. As long as you aren't too far apart from that you'll probably be ok. If you are far apart from that, then I would want to have some documented evidence if they asked.
 
I've asked a few surveyors for a quote for what's known as a red book valuation which seems the one required for CGT purposes

www.savills.co.uk

In plain English: Red Book valuations

Savills UK | What is it, who needs one and who can prepare it?
www.savills.co.uk www.savills.co.uk

Being quoted between 300 to 500 for this

After querying what they actually provide, it's actually less than a normal survey and it doesn't look like they go out of their way to find issues (which I'd prefer as that would impact the price)

The house has issues and is in need of modernisation so that needs to be reflected in the valuation
 
Personally I would only pay for a survey if HMRC required me to. Thinking about it though I expect they are required, otherwise people would just make up valuations that suit them, so it has to be done by a qualified independent party.

See also:

What is a Red Book Valuation? | Premier Solicitors

Learn more about what a red book valuation is during the probate and estate administration process from legal experts.
www.premiersolicitors.co.uk
 
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Redbook valuation is usually a long form (40+ page) report.

Although £300-£500 for that is good, the fee is based off the estimated value of the property.

You don't need that, just a short form report done by a RICS qualified valuer would be fine, probably be cheaper, what is the estimated value of the property?
 
android-fan said:
Around 100k
Click to expand...

Ok yea that's probably about right then, depending on the valuer (they might not do it) just ask them if they'll do a short form valuation report, on a £100k property should get that for less, maybe £200 depending or less possibly. You are only after a 3 page report that provides the basics and a value.

There is no point getting a more in depth report, it won't affect the valuation figure, just give you a load more ******** you don't need.

The only way to get the valuer to value it lower is if you know one and they are doing you a favour or you bung them some cash ( I wouldn't recommend this either) and keep in mind they are audited themselves, so there is a limit to what the can do anyway.
 
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