In Mrs Dorcas Adebowale Akanwo (as Personal Representative for the estate of Miss Taiwo Akanwo Deceased)  v HMRC [2018] UKUT 0113 (LC), another Lands Chamber case, the Upper Tribunal upheld HMRC’s valuation of a terrace house of £260,000 compared to the value taken by the executor of £200,000. 

S.160 IHTA 1984 defines market value for IHT purposes as the price which the property might reasonably be expected to fetch if sold in the open market at the time of valuation.

Mrs Dorcas Akanwo as executor for the deceased had taken two estate agent indicative valuations in assessing the property value for IHT purposes:

  • She had not commissioned a formal valuation report from a surveyor.
  • The property had been sold less than 18 months after the date of death for £312,000.
  • The District Valuer had valued on the basis on comparable sales including the property next door but one which sold for £264,000 a month before the valuation date. He had also given a 5% discount because the property was tenanted.
  • The UT agreed with the District Valuers assessment of value.

Both this and the other recent Land Chamber case of Palliser v HMRC [2018] UKUT 0071 (LC) are a reminder that any valuation used must be able to stand up to scrutiny by HMRC and, in this case, that saving costs by not obtaining a professional valuation can prove to be a false economy.

Useful guides on this topic

IHT: development land 
When is the development of land a business for the purposes of Business Property Relief (BPR)?

Valuation: companies 
When might a tax valuation be required? What are the main principles in valuing unquoted companies?

External link

Mrs Dorcas Adebowale Akanwo (as Personal Representative for the estate of Miss Taiwo Akanwo Deceased)  v HMRC [2018] UKUT 0113 (LC) 


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