Section 26: reference of cases to the VOA
The Valuation Office Agency's (VOA) technical manual relating to Inheritance Tax.
The role of the VOA is to provide valuation and other advice to HMRC in accordance with the statutory basis. In doing so, caseworkers should have regard to the principles of treating all taxpayers fairly and impartially and that they should be expected to pay only that tax which is due under the law.
In general, valuations should be such that the taxpayer pays neither too much nor too little tax. However, in marginal cases it is permissible to have regard to the amount of extra tax that would be payable when deciding whether or not to challenge a valuation submitted by the parties.
26.2 Scope of section
This section describes the various forms of reference that the VOA receives from HMRC. In England and Wales, these will be routed via the Nottingham Initial Appraisal Unit; whilst in Scotland, these will be routed via the Glasgow Initial Appraisal Unit. As from December 2009, virtually all references will be in Shared Workspace.
All references in this section to CEO refer to the CEO Professional and Policy Support (HMRC Team).
26.3 Time Limits and Targets
There are no specific time limits for reporting references from HMRC. Our Service Level Agreement (SLA) with them contains specific targets for reporting cases within certain average time. In practice this means the aim should be to report the majority of cases well within the stipulated average time. Achieving this means more time and resource can be expended on the more complex cases. The various Key Performance Indicators contained in our SLA with HMRC together with some intermediate time limits during the life of a case are referred to in Section 27 but a summary of their application is set out in tabular form in Appendix 17.
26.4 Importance of the Time Limits and Targets
Under s.233 IHTA 1984 (as amended) a taxpayer is liable for interest on unpaid tax. Generally liability accrues six months after the date of the taxable event.
Also, HMRC is committed to reducing the elapsed times of its enquiries and closer working with the VOA is part of this.
Caseworkers must therefore ensure that they cannot be said to have contributed to delays in dealing with cases and every effort must be made to adhere to all the time limits and targets set down.
Delay and Penalties
26.5 Remission of Interest
Where interest is payable in respect of an estate (see 26.4 above) and there have been unreasonable delays by HMRC by reference to published targets for dealing with correspondence, consideration will be given by HMRC to waiving interest for the period of the delay.
HMRC will, in the first instance, take an overview and, if they are satisfied there have been HMRC delays, they may offer remission to the parties. However, in cases of doubt, or where their initial offer is not accepted and they feel there has been delay in the VOA dealing with the case, they will consult with CEO before they decide whether further remission is appropriate.
In paper-based cases, CEO will forward the request by email, normally to the Sector Leader for the area in question. On receipt of the request the Sector Leader should arrange for the file to be forwarded to CEO.
CEO will then reply to HMRC, forwarding the diary report and giving an objective appraisal of the handling of the case in the context of the complaint that has been made.
If HMRC contacts the caseworker directly requesting Case Diaries or files and it is apparent that CEO have not been consulted first, the latter should be advised of the circumstances before any further action is taken.
In electronic cases, HMRC will produce the case diary from information available in the Shared Workspace file. This will be done in conjunction with CEO, who may contact either the Sector Leader or the caseworker, if any matters require clarification
Where IHT receive a claim for costs or compensation in relation to a delay or mistake attributed to the VOA, these cases will be passed to CEO to allocate to the appropriate VOA complaints team to consider and make any appropriate payment.
Schedule 40 of the Finance Act 2008 introduced a new regime for penalties in Inheritance Tax cases, where the taxable event took place on or after 1 April 2009 and the due date for filing is on or after 1 April 2010. This Penalty regime applies where: there have been inaccuracies in returns or other documents; information has been deliberately withheld or false information has been deliberately supplied; or there has been a failure to notify HMRC of an under-determination of tax.
It is up to HMRC to decide on whether to pursue a penalty and the level of this will depend on whether the act giving rise to the inaccuracy amounted to careless or deliberate behaviour and whether the subsequent disclosure was unprompted or prompted by the actions of HMRC (including the VOA).
26.7 Penalties – Guidance and Examples
It is accepted that there may often be a range of valuations and agreeing a figure different from that returned does not automatically mean that a penalty will be in point. Some valuations will be more speculative than others (e.g. those with ‘hope’ of development value) and will inevitably have a broad margin for error. Sometimes incorrect valuations may arise as a result of an inaccuracy despite taking reasonable care and the legislation takes these cases outside of the penalty remit.
However, there are other instances when the taxpayer’s actions may render them liable to a penalty. Some examples of when a taxpayer’s actions may be regarded as giving rise to a penalty are listed below but this list is not exhaustive.
Giving incorrect instructions to a professional valuer (e.g. the valuer is instructed to ignore ‘hope value’).
Incorrectly identifying the property to be valued.
Valuing subject to a sitting tenant or other restriction when that is not the case.
Basing a valuation on incorrect floor areas or land areas.
Using incorrect trading figures when the valuation is based on the profits method.
Returning a valuation inconsistent with a valuation used for another purpose or other taxable occasion.
Agreeing a significant valuation change from an unrealistic returned valuation that cannot be explained adequately by difference of opinion.
Some of the actions above may not have been deliberate but they may suggest a “failure to take reasonable care”.
26.8 Penalties - Procedure
Caseworkers should be proactive in identifying cases where the taxpayer may be culpable and bring details to the attention of HMRC. Contact should be made with HMRC at an early stage and caseworkers should not wait for negotiations to be concluded. It is recommended that caseworkers initially discuss the circumstances with HMRC and then, if required, provide details in writing. Under no circumstances should caseworkers approach taxpayers or their representatives on this point.
In cases of doubt or where the case is particularly sensitive, difficult, protracted and/or there is a likelihood of complaint, advice should be sought from CEO.
Part 2 : References from HMRC(IHT)
Subject to 26.27 below, the VOA is authorised to act in respect of any reference from HMRC(IHT) for valuation or other advice in connection with IHT.
It should, however, be remembered that, although the case papers may be with the VOA, HMRC(IHT) retains overall ownership of the case. Therefore, it is imperative that HMRC(IHT) is kept advised of developments (especially if it appears likely that the case will become contentious) and all time limits set out in the following sections must be strictly adhered to.
26.8 Communications with HMRC(IHT)
All communications from HMRC(IHT) should contain the name of the deceased and the HMRC(IHT) reference. In addition communications will contain, either:
The Mailpoint email address (see below) of the section dealing with the case; and/or The HMRC(IHT) caseworker’s name and telephone number.
In order to enable them to identify a case, the DV should quote both the HMRC(IHT) reference and the name of the deceased when contacting HMRC(IHT) by any means.
Unless instructions provide for the dispatch of a hard copy form or it is necessary to enclose papers which cannot be sent as a Microsoft Word attachment, communication with HMRC(IHT) should normally be by telephone or email.
In order to ensure that email messages do not rest in redundant or vacant inboxes, HMRC(IHT) has set up Mailpoints to receive and distribute emails from the VOA. Emails should normally be sent to these Mailpoints in the first instance (their email address appearing in the Global Address List will commence “Mailpoint…(CTO))”. If, exceptionally, the reference does not contain a Mailpoint address, any reply should be addressed to Mailpoint A (cases in England and Wales only).
Most cases referred to the VOA will be dealt with by the Primary Compliance and Support (PC&S) teams in HMRC(IHT). Because PC&S operate on a team-working basis, no individual team member has responsibility for a particular case. Consequently any email queries DVs have on such cases should be sent to the designated Mailpoint. For telephone enquiries please see below.
The Compliance groups in HMRC(IHT) normally deal with the more complex references. Here individuals do have responsibility for particular cases; however, DVs should only contact them direct by email when they are sure that they are ready to receive the message.
Written communications should normally be sent via the Cumbernauld Distribution Centre; or in exceptional circumstances, by either Taxpost Direct or fax.
In the case of general enquiries or where the direct line number of the HMRC(IHT) caseworker is not known (eg. where the DV only has details of the sectional Mailpoint involved), HMRC(IHT) can be contacted by telephone on the following numbers:
HMRC(IHT) (Ferrers House, Nottingham) 0845 302 0900 (Helpline)
SAV (Fitz Roy House, Nottingham) 0115 974 2222
HMRC(IHT) (Meldrum House, Edinburgh) 0131 777 4050
HMRC(IHT) (Dorchester House, Belfast) 02890 505353
Additionally, if the DV has specific queries regarding cases being handled by the PC&S team in Ferrers House (i.e. Mailpoint G cases); calls can be directed to a number of dedicated extensions. These are:
0115 974 2653 0115 974 2619
To avoid bogus enquiries the caller must identify him/herself at the start of the conversation, by name and office, as HMRC(IHT) have similar instructions to those contained in the Disclosure of Information Manual 1.16.
Telephone calls to enquiries extensions should normally be limited to the obtaining of factual information but, should clarification be required, the assistance of the HMRC(IHT) Liaison Officer with the VOA (who can be contacted on 0115 974 2876) or the Valuation Office Liaison Officers (VOLO) at CEO (DVS) may be requested.
26.9 Occasions giving rise to reference
There are three main occasions when HMRC(IHT) will refer an IHT case to the VOA, namely:-
a) chargeable transfers of value on the occasion of a death;
b) chargeable transfers of value made during a person’s lifetime;
c) chargeable transfers of value in connection with settlements.
26.10 Method of issue
Most cases are issued to the DV or MV, as appropriate, by HMRC(IHT) via Taxpost Direct or the Cumbernauld Distribution Centre.
Cases issued to the Nottingham Initial Appraisal Unit (IAU) will be hand delivered direct to the unit
Types of Reference
Prior to issuing instruction to the VOA, HMRC(IHT) will classify a reference into one of 2 categories. These categories will, in turn, help to determine which case complexity weighting is allocated to a case when it is received in the VOA (see 26.31 below). These categories are:
a) Standard references (see 26.12 below). b) Complex references (see 26.13 below).
26.12 Standard references
Standard references will be made in all cases where HMRC(IHT) is satisfied that the estate does not fall within the definition of a Complex reference (see 26.13 below). All cases (other than PC&S cases referred to the IAU) will be referred to the VOA on Form VOA 1 (see 26.15 below). The vast majority of cases referred on VOA 1 will be references from the PC&S team in HMRC(IHT).
Where a PC&S case is referred to the IAU, the reference papers will include HMRC(IHT)’s own case file (see 26.19 below).
26.13 Complex references
Complex references will be made in all cases where HMRC(IHT) is satisfied that one or more of the items returned falls within at least one of the following definitions:
a) Cases where Agricultural Relief has been claimed and the DV is required to advise whether it is considered that the farmhouse and buildings are of a character appropriate to the property (see Section 9). b) Cases where Agricultural Relief has been claimed and HMRC(IHT) requires DV’s assistance to help determine whether land or buildings fall within the definition of agricultural property (see Section 9). c) Cases where Woodland Relief has been claimed (see Section 10). d) Cases where Business Relief has been claimed and HMRC(IHT) requires the DV’s assistance to help determine whether an asset comprises relevant business property (see Section 11). e) Cases where conditional exemption has been claimed in respect of a property on the grounds that it is either a qualifying National Heritage property or it is to be included in a maintenance fund required to be provided for the upkeep of such property (see Section 20). NB. such cases should be referred to the DV via CEO. f) Cases involving lifetime transfers, where land has been retained by the donor, or involving gifts with reservation (see Section 4 para 4.16 and Section 4 para 4.35). g) Cases where the property is structurally damaged and HMRC(IHT) requires a valuation which includes the benefit of an insurance policy or a right to claim against a third party (see Section 7 para 7.35). h) Cases involving the Mineral Valuer (see 26.36 - 37 below). I) Cases involving the valuation of goodwill (see Section 16 paras 16.14 - 18). j) Cases involving the valuation of partnership property (see Section 19). k) Cases where the estate comprises four or more properties situated within a single DV area.
All such cases, with the exception of e. above will normally be referred to the VOA on Form VOA 2 (see 26.16 below). The majority of cases referred on VOA 2 will be references from the Compliance groups in HMRC(IHT).
Forms of Reference
Most references from HMRC(IHT) will be made on either Form VOA 1 or Form VOA 2. These forms will normally be accompanied by either Form D12 (in the case of references on death) or Form IHT 37 (for references in respect of lifetime transfers and settlements) which will include a schedule of the properties to be valued.
HMRC(IHT) will also occasionally issue a covering memorandum as a supplement to the details contained on the forms and, in exceptional circumstances, will forego the use of the forms and will issue instructions direct by memorandum.
26.15 Form VOA 1
Form VOA 1 (pink paper) is entitled “Request for initial VOA case appraisal” (see Appendix 2) and will be used in cases where HMRC(IHT)has classified the referral as being a Standard reference in accordance with 26.12 above.
It may also be accompanied by Form VOA 3 (see Appendix 3A) which will provide any supplemental information.
Form VOA 1 contains the following information:
- the name of either the deceased, transferor or settlement as appropriate;
- the nature of the occasion giving rise to the reference (see 26.9 above);
- the date at which the property is to be valued (this will normally be the same date as the occasion giving rise to the reference);
- details of the tax threshold and the cumulative value of the estate;
- where the rate at which tax is to be charged is other than 40%, details of the rate at which tax is to be charged will be provided (see Section 27 para 27.7 for additional details). NB. This box will also be completed in the case of sub-threshold estates where, if tax is to be charged, the rate will be other than 40%;
- where an item to be valued is not an entirety interest, the size of the relevant share (see Section 18);
- whether the related property provisions apply to any item (see Section 15)
- where the case is a multi-district case, details of the other DV unit areas involved (see 26.29 below);
- whether there are any attachments, eg. plans, copies of leases, professional valuations etc;
- HMRC(IHT)reference, cost centre, a telephone contact number and (sometimes) details of the HMRC(IHT) caseworker, if a specific individual has been nominated at that stage
- details of the HMRC(IHT) office and Mailpoint to which any reply should be sent (see 26.8 above);
- any other specific instructions or matters of interest to the DV (NB. In some instances, this section may be extended on to a separate form, VOA 3 (see Appendix 3A).
There is also a box for completion in the VOA when Form VO1120 is completed and returned to HMRC(IHT) in accordance with Section 27 para 27.9 et seq.
26.16 Form VOA 2
Form VOA 2 (purple paper) is entitled “Request for full VOA evaluation” (see Appendix 3) and will be used in cases where HMRC(IHT) has classified the referral as being a Complex reference (see 26.13 above).
In addition to the information contained on Form VOA 1 (see 26.15 above), it will also indicate either on the form or by way of a covering memorandum why the reference is considered to be a Complex one.
NB. for non-taxpaying cases involving claims for Agricultural Relief/Business Relief, the Cumulative Value of the estate shown on VOA 2 will be net of the reliefs claimed.
26.17 Form D12
Form D12 (see Appendix 8) is a form used in death cases and comprises part of the IHT 200, which will normally have been completed by the personal representatives of the deceased. If, exceptionally, it has been completed in HMRC(IHT), the form will indicate that this is the case.
Form D12 provides the following information:
On the front of the form
Details of the name, address, reference and telephone number of the taxpayer’s representative who the caseworker should contact if necessary. NB. This should almost always be the solicitor or the Personal Applicant, (rather than the surveyor or valuer) in order to facilitate arranging inspection etc.)
Details of the land and buildings owned by the deceased. In particular:
a) each item of property is to be numbered
b) the full address (including postcode) of each item is to be included wherever possible; alternatively a full description and plan should be provided so that the property can be identified. This section will also include details of the deceased’s share in the case of jointly owned property (NB. This may well be different to HMRC(IHT)’s valuation requirements included on Form VOA 1 or VOA 2)
c) includes details of the deceased’s interest in each item and, if leasehold, details of the rent paid
d) includes details of any lettings to which an item was subject. If an item was let the parties should provide HMRC(IHT) with a copy of each lease, sub-lease and business or agricultural tenancy agreement. If the lease does not say so, or there is no written agreement, the parties should provide HMRC(IHT) with details of:
the date the tenancy/lease began
the length of the tenancy/lease
the rent payable and whether it can be reviewed
who is responsible for the outgoings
the name of the tenant.
If any item was unoccupied at the date of death, the parties should write “vacant” in this column.
e) includes details of any agricultural relief, woodland relief or heritage exemption claimed
f) includes details of the parties’ opinion of the open market value of each item as at the date of death. If any item was jointly owned, the parties should state their opinion of the value of the deceased’s share and show how this figure has been calculated.
On the reverse of the form
Whether any items were subject to damage which could have been subject to a claim under buildings insurance (see Section 7: para 7.35). If the parties confirm that there were any such items, they should provide details of the damage (including any surveys or engineer’s reports) and state whether the deceased held an insurance policy covering all or part of the remedial works.
Whether any item has been sold or is intended to be sold within the next 12 months. If the parties confirm that there are any such items, they should provide details of:
g) the Item Number (from 2a above)
h) the current position re the sale, ie. whether the property:
has already been sold (giving date of exchange of contracts/completion of missives), is on the market for sale, or is to be sold later on
i) the asking price, or sale price
j) where an item has sold, the type of sale, ie. whether it was at “arm’s length”
k) whether the sale price includes any amount for fixtures and fittings, carpets, curtains etc.
l) whether the parties wish to adopt the sale price as the date of death value.
26.18 Form IHT 37
Form IHT 37 (Appendix 7) is used in case references in respect of lifetime transfers and settlements and contains similar information to Form D12 above. (If the parties happen to use older versions of Form IHT 37, the information supplied may not be as comprehensive as that in the latest version and/or in the D12 – in particular the prospective sale data may not be provided).
26.19 References to the Initial Appraisal Units (IAU)
The Nottingham IAU is a small unit of VOA staff located in HMRC(IHT)’s Head Office in Nottingham. The unit currently carries out Initial Appraisals (see section 27 para 27.2 et seq) of certain cases falling within agreed parameters. These are currently:
- All the real property, chargeable to Inheritance Tax, is domestic and is situated within either England or Wales;
- The value returned for each individual item must be £500,000 or less;
- The reference is not one that would normally be submitted on Form VOA 2 (see 26.13 above), apart from cases where the estate comprises four or more properties situated within the geographical area covered by the IAU;
- The reference does not involve the valuation of a leasehold interest which had less than 60 years to run at the date of valuation;
- HMRC(IHT) has not requested specific advice (e.g. querying whether the DV has any record of recent expenditure on a property)
The case papers passed to the Unit will comprise HMRC(IHT)’s own case file and any specific valuation requirements (e.g. for undivided shares) will be included in the accompanying Route 6 or VOA 1 form (N.B. for non-taxpaying cases, the Route 6 Form should also include details of the current cumulative value for IHT purposes).
When, following an Initial Appraisal (see Section 27 para 27.14), the IAU is unable to accept a returned figure, the case papers will be transferred to the Registration Centre for the DV Unit in whose area the property is situated. Because the case papers will have been prepared in the IAU, no Form VOA1 or VOA2 will normally be included with the reference (the exception is with regard to those references from the Compliance groups in HMRC(IHT), where references to the IAU will be made on the VOA 1 rather than the Route 6 form’ or cases referred to the IAU from the Edinburgh or Belfast offices of HMRC(IHT)) . The papers will normally comprise:
- A photocopy of Form D12 (see 26.17 above);
- A photocopy of the completed Route 6 form, or the original VOA 1 form;
- A photocopy of any valuation submitted with the papers;
- A TRACS sheet;
- A History Working Sheet;
- A copy of the Digital Map outlining the subject property in red;
- An Initial Appraisal Control Sheet.
There is also a small IAU in the Glasgow office of the VOA. This unit carries out an initial appraisal of all first reference cases, where the property involved is located in Scotland.
26.20 Other requests for advice
HMRC(IHT) may also request either an informal opinion of value or general advice concerning an estate. Such requests will normally be made by memorandum and, unless otherwise directed by HMRC(IHT), the DV should comply with them on the basis of information available, and without inspection or reference to the parties. Examples of such requests will include:
- when property passes on the death of a life-tenant/liferenter or an annuitant and HMRC(IHT) desires to ascertain, before raising a claim, whether the resultant cumulative total at the date of death exceeds the tax threshold;
- cases where information is received by HMRC(IHT) about a death otherwise than by way of an Inland Revenue account an informal opinion of value may be requested.
References from Shares and Assets Valuation, Inspector of Taxes and Other Sources
26.21 References from Shares and Assets Valuation
Shares and Assets Valuation cases will be referred in accordance with the procedure set out in Section 16.
26.22 References from Inspector of Taxes
In certain instances an Inspector of Taxes may directly request a value ascertained for IHT purposes (see CGT Manual : Section 6 Part 7).
26.23 References from Other Sources
Should an officer from any non-Her Majesty’s Revenue & Customs body raise any question of value in connection with an IHT case, the facts should be referred immediately to CEO (DVS).
Part 3 : Procedure on receipt of References
26.24 Knowledge of cumulative total for IHT
Caseworkers should avoid indicating to the parties that they are aware of either the cumulative value for IHT, the tax threshold or the rate of tax.
26.25 Classification of cases
The Service Level Agreement between HMRC(IHT) and the VOA defines a case as a reference to an individual DV or MV from HMRC(IHT), related to a single taxable event at the same valuation date, irrespective of the numbers of properties involved.
A case arising from a single taxable event but relating to properties within separate DV unit areas, or relating partly to minerals, will constitute separate cases for each of those DVs or MVs. Such cases are known as “part” or “multi district” cases (see 26.28 below).
If a single form of reference is received from HMRC(IHT) requesting valuations at two valuation dates, the reference should be treated as two separate cases and HMRC(IHT) should be advised accordingly when acknowledging receipt (see 26.32 below).
N.B. A reference to the Nottingham IAU in respect of a deceased’s estate will always comprise a single reference whilst it is being dealt with by the unit (see 26.29 below).
For the registration and recording of cases see the Revenue Process Maps and the Caseworker Support Material which can be found on the intranet. IHT cases are classified as follows:-
Initial Appraisal (see Section 27 para 27.2)
case type 177/01
Valuation (see Section 27 para 27.14)
case type 180/01
26.26 Misdirected cases
If, on receipt of a reference from HMRC(IHT), it is discovered that none of the property requiring to be valued is situated within that DV unit area, after cancelling any office stamp and correcting the office number, the papers should be sent immediately to the DV unit concerned and HMRC(IHT) should be advised of the action taken.
If, on receipt of a reference from HMRC(IHT), it is discovered that some of the property requiring to be valued is situated outside that DV unit area, and HMRC(IHT) has not indicated on Form VOA 1 or VOA 2 that the case is a multi-district case, the relevant papers should be copied and sent immediately to the DV unit concerned and HMRC(IHT) should be advised of the action taken. Thereafter the case should be treated as a multi-district case (see 26.28 below).
26.27 Papers incomplete
Where the papers referred by HMRC(IHT) are clearly incorrect or incomplete they should be returned to HMRC(IHT) together with a memorandum stating the reason for their return.
It must be emphasised that papers should only be returned in exceptional circumstances (e.g. where there is insufficient information to identify a property in order to register a case on CRAC) and every effort should first be made to obtain the requisite information, either by email or telephone (see 26.8 above). Once a case has been registered on CRAC, it should not be cancelled because the papers are subsequently considered to be incomplete but, instead, any clarification of instructions should be obtained from HMRC(IHT) as a matter of urgency. In references involving more than one item in the same DV unit area and where sufficient information exists to register a case on CRAC against at least one of those items, the papers should not be returned and, again, any clarification of instructions should be obtained from HMRC(IHT) as a matter of urgency.
If factual information is required in order to register the case (eg. Post code details), the parties named on Form D12 may be contacted in order to establish this. If essential information is required in order to carry out the valuation, the DV should proceed in accordance with Section 27 para 27.21 et seq.
26.28 Problem cases
Any request for advice which appears to give rise to difficulty or inconsistency, e.g. a request which, if complied with, would seem to conflict with normal valuation practice, should be referred to CEO (DVS) for confirmation prior to any action being taken.
26.29 Multi-district cases
Multi district (part) cases are defined at 26.24 above.
Such cases should be dealt with in the same way as single district cases. However, where similar types of property or similar interests in property exist in more than one DV unit area which are being dealt with by two or more caseworkers, it is important that any necessary liaison with other caseworkers is carried out prior to any values being reported, or before any proposed values are notified to the parties.
In the circumstances set out above it is the responsibility of the DVs involved to ensure that liaison is carried out. In cases involving two or more DVs, the co-ordinating role should normally be assumed by the DV with the greatest number of properties or, where more appropriate, the properties with the highest value. Where difficulty arises the views of CEO (DVS) should be sought.
N.B. A reference to the IAU in respect of a deceased’s estate will be treated as a single case, irrespective of whether the property comprised therein is located in more than one DV Unit area. If the returned values in more than one DV Unit area cannot be accepted the IAU is responsible for raising the required number of new cases, copying the papers and forwarding to each Registration Centre. In such cases the IAU will attach a covering letter setting out the new case numbers and the DV Unit they have been allocated to. On receipt of the case the Registration Centre will then make the case formal and obtain the new TRACS bar-codes.
26.30 Part Cases within a single DV unit area
For the avoidance of doubt, where a reference covers properties dealt with by two or more caseworkers within a single DV unit area, it will comprise a single case, with a single TRACS bar code.
In these circumstances, it will normally be up to the DV to decide which caseworker should act as the co-ordinating caseworker.
The co-ordinating caseworker will normally be the person who deals with the leading property, or has the more complex valuations. He/she will be responsible for sending any acknowledgements (see 26.32 below and Section 27 para 27.18), interim reports and issuing the final report on completion of the case.
26.31 Registration and recording of cases
For registration and recording of cases see Section 27, the Revenue Process Maps and the Caseworker Support Material which can be found on the intranet.
26.32 Case Complexity
In common with other casework received from HMRC, work from HMRC(IHT) is allocated one of four case complexity codes on receipt. The complexity code attached to a particular case is important as this will govern how much time and resources the VOA should dedicate to it.
The following criteria should be considered when deciding which code should be allocated to a particular case:
- The tax at stake.
- The number of properties involved.
- The level of value.
- The complexity involved.
All casework received from HMRC(IHT) must be coded using the following criteria:
All cases not meeting the criteria for Complexity 2, 3, or 4 below.
All cases referred on form VOA 2. Cases where the cumulative returned value is between £500,000 and £1,500,000. Cases involving the valuation of residential leasehold interests with under 60 years unexpired. Cases where the valuation is likely to incorporate an addition for “hope” or “marriage” value, which is estimated at less than £100,000.
Cases where the cumulative returned value exceeds £1,500,000. Cases involving the valuation of estates which exceed 405 hectares (1,000 acres) in area. Cases where the valuation is likely to incorporate an addition for “hope” or “marriage” value, which is estimated to be £100,000 or greater. Cases where an Appeal Report is required (NB. this category does not include Initial Agricultural Relief Reports). Cases where an Initial Agricultural Relief Report has been issued and HMRC(IHT) subsequently requests the DV to negotiate.
Any case which involves the valuation of more than 4 “properties”.
In cases involving more than one property, the above cumulative returned value limits should be taken as the total of values returned at a single valuation date.
Any cases referred via CEO (eg. Heritage Relief cases), will contain specific instructions as to the initial complexity weighting to be adopted.
For the purpose of deciding how many properties are to be valued, a ‘property’ should be taken to be any separately identified valuation lot adopted by the taxpayer, where the returned value exceeds £5,000.
See Section 27 para 27.2, for procedures regarding the allocation of an initial complexity code and Section 27 para 27.14, for any subsequent alterations of complexity codes.
Once a case has been allocated a complexity code, details of this should be input onto CRAC.
For all references received from HMRC(IHT), see Section 27 para 27.18 and 27.81 with regard to acknowledgements. For the avoidance of doubt, where the case involves properties being dealt with by more than one caseworker within a single DV unit (see 26.30 above), HMRC(IHT) only requires a single acknowledgement from that unit.
In multi-district cases, each DV unit involved should send an acknowledgement.
Cases received from Shares & Assets Valuation on Form Val 63 are to be acknowledged within 5 working days of receipt.
26.34 Retention of case papers
Unless HMRC(IHT) has specifically requested their return, the DV should retain all case papers.
26.35 Identification of responsibility
Where it is thought that the value of minerals, or any property for which the Mineral Valuer is responsible for rating purposes, may be involved (see Rating Manual - Volume 2: Section 11 and Management Circular No 806), caseworkers should proceed in accordance with 26.35 and 26.36 below as appropriate.
26.36 Forming a separate item
Where the mineral bearing land is, or should be, treated as a separate item (see Section 25), the DV should proceed in accordance with 26.25 above, forwarding the appropriate papers to the Mineral Valuer.
Where the mineral bearing land comprises a separate item and the parties have claimed that Agricultural Relief should apply to that item, the responsibility for dealing with the question of Relief lies with the MV.
26.37 Other cases
In other cases, where it is considered that the mineral bearing land forms part of a larger unit of valuation, the case should be treated as a “parent and child” case and all necessary information (including the case’s TRACS bar code) should be forwarded to the Mineral Valuer requesting advice as to the additional value, if any, in the unworked minerals.
Where the mineral bearing land does not comprise a separate item and the parties have claimed that Agricultural Relief applies, the responsibility for dealing with the question of Relief lies with the DV.
Other Specialist Advice
The services of the various specialist teams (e.g. the Business Assets and Machinery Team) are available for both valuation and negotiation. Requests for assistance should be made in accordance with the principles set out in Chapter 5 : Section 16 para 16.157 et seq.