Capital Gains Tax Valuation
Capital Gains Tax is payable in respect of chargeable gains accruing between the date the tax was introduced, (or the date of acquisition if later) and the date of disposal or assumed disposal of interests in property. Disposal can include a sale, gift, demolition, destruction, transfer or assignment of the property. It can also include the grant of a lease, the grant of an option, or the receipt of a capital sum.
The acquisition cost will normally be the price paid for the asset, if the asset was acquired after the tax was introduced.
For assets that were acquired before the tax was introduced, the tax regime for UK residents is different to the tax regime for non-UK residents.
For UK Residents who dispose of a property that is not their main residence, and who acquired the property prior to 31st March 1982, then the value as at 31st March 1982 is used as the deemed acquisition cost. Dunsin Surveyors have a vast database of 1982 property values to enable us to provide 31st March 1982 property valuations for Capital Gains Tax purposes for UK residents.
For non-UK Residents who dispose of a property that was acquired prior to 5th April 2015, then the value as at 5th April 2015 is used as the deemed acquisition cost.
Non-UK residents who acquired property prior to 5th April 2015 are recommended to obtain a valuation report as at 5th April 2015 for future record keeping and Capital Gains Tax reporting purposes.
We are specialists at carrying out valuations in accordance with the practice statements in the RICS Valuation Standards, and particularly in accordance with the RICS Guidance Note (UKGN3) on valuations for Capital Gains Tax, Inheritance Tax and Stamp Duty Land Tax.
The basis of valuation for Capital Gains Tax purposes is Market Value. The statutory definition of Market Value for Capital Gains Tax purposes is contained in Section 272, Taxation of Chargeable Gains Act 1992. It is broadly defined by the Royal Institution of Chartered Surveyors as:
‘The price which the property might reasonably be expected to fetch if sold in the open market at that time, but that price must not be assumed to be reduced on the grounds that the whole property is to be placed on the market at one and the same time.’