Inheritance Tax Manual

Appendix 24: the expert's report and notes for guidance of advocate

The Valuation Office Agency's (VOA) technical manual relating to Inheritance Tax.

The object of an expert’s report is to provide for the advocate, in advance of the hearing a statement of what the witness intends to say. It should contain the whole of the substance of the intended evidence in a logical sequence. The draft report must not be prepared until consideration has been given to the schedule of comparable properties and other exhibits (see Appendix 25).

The report will normally be typed in double spacing on size A4 paper, (or as otherwise indicated by the advocate) and a margin left for the legal adviser to make notes. The paragraphs should be numbered and suitable marginal headings should be given to facilitate reference. The reference number of any exhibit mentioned in the text will be noted in the margin. Where the text of an exhibit is quoted in the report it must be suitably indicated e.g. by indentation and typed in single spacing.

The report must be headed by the LT’s reference number, details of the parties and the address or short description of the property the subject of the reference.

The following is an outline of the material to be ideally incorporated, (but not necessarily in the same order) as appropriate to the particular case.

  1. The qualification of the witness. Here the witness should state not only professional qualifications and position, but details of practical experience in matters which are relevant to the dispute, including professional experience in a particular locality.
  • 2) A statement to the effect the report complies with the requirements of the Royal Institution of Chartered Surveyors as set down in Surveyors acting as Expert Witness: Practice Statement and with Rule 42 of the Lands Tribunal Rules. This typically will read:

“I understand that my primary and overriding duty as a valuer is to the judicial body to which the evidence is given. I declare my belief in the accuracy and truth of the matters put forward in this expert’s report. It includes all facts that I regard as relevant to the opinions expressed and any matters affecting the validity of the opinions. This report complies with requirements of the Royal Institution of Chartered Surveyors as set down in Surveyors acting as Expert Witness: Practice Statement and with the Lands Tribunal Rules 1996 Part VIII Section 42”

  1. The purpose of valuation i.e. the particular task involved.

  2. The appropriate statutory definition of market value.

  3. The event(s) giving rise to the chargeable transfer and determining of the valuation date.

  4. Details of the taxpayer’s interest e.g:

Freehold - with vacant possession or subject to tenancies fully described.

Leasehold - with full particulars of term, rent, covenants and restrictions and whether with vacant possession or subject to tenancies fully described.

  1. A statement regarding inspections, with dates. It is desirable for witnesses to be able to state that they have viewed the property (at least externally) recently as well as closer to the valuation date.

  2. Full statement of the situation, description, construction, accommodation, condition and area of the property. Plans, maps, photographs, line drawings etc should be prepared, (see Appendix 25) and the reference numbers typed in margin.

  3. Full details of all incidents or encumbrances to which the property is subject e.g. easements, restrictions, covenants, conditions, fixed charges or other burdens. Where the restrictions are statutory the provisions which apply to the restrictions. If the witness knows of no encumbrances it should be so stated.

  4. Availability of public services at the valuation date.

  5. The means of access to the land, the nature and condition of the roads, whether or not repairable by the public at large and, if so, whether any road charges are outstanding and the extent of future liability in respect thereto.

  6. Planning provisions affecting the property at the valuation date - copies of relevant documents. If planning matters are in dispute and evidence thereon is to be given by another expert witness, the valuer should state the conclusions and assumptions he has made in the light of that evidence.

  7. Reference to and analysis of comparables with all relevant comments.

  8. Detailed comments and criticism of parties’ valuation, including the relevance or otherwise of comparables submitted by parties.

  9. Valuation - statement as to statutory basis of valuation, valuation date, method of valuation. The report should be concluded with the valuation as already exchanged under Rule 42. It should be noted that the valuation is a formal document and it should be prepared as such.

Notes for advocate

The purpose of “Notes for Advocate” is to enable the HMRC Solicitor to have a complete understanding of the evidence proposed to be given by the DV and to assist in the preparation by the advocate of the reply to the case expected to be made by the parties. The notes should include all relevant background information, including negotiations in the case, which are not readily apparent from the expert’s report and other exhibits. Matters which the DV believes but cannot prove in evidence should be included.

Where necessary the Notes should highlight those matters which are favourable to the case for HMRC but it is important that nothing which may be prejudicial should be omitted. The case law touching upon the dispute should be mentioned and if the DV is aware or expects that the case for the claimant will make reference to a particular decision, this should be stated.

The DV should give an indication of replies to questions which it is expected will be asked by the other side in cross-examination. The DV should also indicate the points which may need to be covered by the advocate in cross-examination of the witness for the parties, e.g. where the DV expects that the evidence for the parties will conflict with that which the DV intends to give.

It is essential that these notes be supplied prior to conference with the advocate and the DV should include a list of the points for discussion in conference.