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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Land: valuation: undivided shares: exceptions

It should be noted that land held in undivided shares is not always to be valued on an undivided share basis. It is necessary to identify, as at each date for which a valuation is required, the asset which the owner has. Jointly held land is to be valued on the ‘entirety’ basis in the following circumstances.

Partnership assets - Statement of Practice D12

Where land is held as a partnership asset requests for valuations should continue to be made on the basis that each partner’s asset is a fraction of an entire asset. This follows the treatment set out in Statement of Practice D12. See CG27250.

Acquisition following death - TCGA 1992/S62

On a person’s death land may pass to two or more legatees. However it passes first, by virtue of Section 62 (1), to the personal representatives and then to the legatees. The legatees are then deemed to acquire the property at the same value and the same time as the personal representatives, Section 62 (4). It follows that if two or more legatees acquire ownership of land together they acquire their respective interests at a value equal to a proportionate part of the entirety value.

Absolute entitlement - TCGA92/S71 (1)

Where assets are held in trust a deemed disposal and reacquisition occurs when the beneficiaries become absolutely entitled to the assets, see CG37100+. Because the trustees, and not the beneficiaries, make the deemed disposal and reacquisition any land held in its entirety by the trustees should be valued on that basis. Reacquisition by the trustees is as bare trustee for the beneficiaries. It follows that if two or more beneficiaries become absolutely entitled to land as against the trustees they acquire their respective interests at a value equal to a proportionate part of the entirety value.

Death of life tenant - TCGA92/S72

Where assets are held in trust and a life tenant, with an interest in part of the income only, dies, and the property continues to be settled property, any land comprised in the trust assets is to be valued as an entirety, and a fractional share deemed to be reacquired at market value, see CG36470+.

From what is said above it follows that valuations of the same asset may be required on different bases. For example, if the interest in the land was acquired before 31 March 1982 in one of the exceptional circumstances listed in this paragraph the valuation at 31 March 1982 will still be on the undivided share basis.