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HMRC internal manual

Capital Gains Manual

Private residence relief: permitted area: action taken by the Valuation Office Agency (VOA)

On referral to the VOA, the caseworker will make an initial review of the disposal based on the information that is available.

If the VOA decide that the taxpayer’s contentions are acceptable they will notify you of this and you should proceed to agree the amount of any gain.

If, on the information available, the VOA are unable to accept the taxpayer’s contentions they will ask you whether you have any objection to them treating the reference as a request for an ‘agreed’ valuation. The reason for this is to enable the VOA to carry out an inspection of the property to be able to demonstrate that all relevant factors have been taken into account in exercising their judgement.

On receipt of such a request you should advise the VOA whether or not you are happy for them to proceed on this basis. If you maintain your request for a ‘not negotiated’ opinion, then any figure provided by VOA may inform your actions, but is not a figure or opinion which you should put to the taxpayer.

If you are happy for the VOA to reclassify the case as an ‘agreed’ request and proceed, the VOA will make an inspection. Once an opinion has been formed the VOA will let you have an interim report and ask whether you wish them to commence negotiations. At the same time as providing you with an interim report, the VOA will also advise the taxpayer of their opinion.

On receipt of the interim report you should prepare a computation based on the VOA’s opinion and forward a copy to the taxpayer explaining that it is based on the VOA’s preliminary views. If the taxpayer is able to accept the VOA’s opinion you should notify the VOA accordingly. However if the taxpayer is unable to accept the VOA’s opinion you should ask the VOA to enter negotiations. The case will then be treated as one requiring a formal ‘agreed’ opinion.