IHTM24164 - The District Valuer: VOA interim report
If the District Valuer (DV) considers that any property on which agricultural relief has been claimed does not qualify as ‘agricultural property’ then an Interim AR Report will be sent to you.
As soon as the Interim Report has been received, it should be referred to Technical with an estimate of the tax at stake. Technical will review the case and discuss with you which of the following actions are appropriate.
Technical take the view that the case for continuing to challenge the AR deducted is not strong or not worth pursuit.
Technical will advise you to discontinue this aspect of the enquiry and you should inform the DV accordingly. In such cases you should make it clear to the parties that the settlement is made without prejudice to the question of whether or not the property constitutes ‘agricultural property’.
The report gives Technical sufficient information for them to form the view that the AR does not apply
In the first instance Technical will consider whether we can disallow the deduction without going back to the DV. If so, either you or Technical should inform the DV. Technical will provide guidance on how to proceed and if it is felt a meeting would be appropriate, they will usually attend. The DV should be kept informed of progress throughout.
Once it becomes clear that the parties do not accept relief is not available, under advice from Technical you will need to pass details of all correspondence on the issue to the DV for them to prepare a Defendable on Appeal (DOA) Report. In other cases, you will need to ask the DV to try to agree the extent of the agricultural property and any agricultural values required. Technical will help you with this. If it does not prove possible to agree the extent of the agricultural property or any valuations with the parties the DV will forward a Defendable on Appeal (DOA) Report.
On receipt of the DOA Report you should refer the case to Technical. If the matter is to be pursued to litigation, Compliance Litigation specialists and Technical will liaise with the DV on the preparation of the DV’s expert evidence for a Tribunal hearing.
Technical are unable to form a conclusive view on the basis of the interim report.
Technical will either discuss the issue with the DV direct, or ask you to obtain more information, in order to clarify certain issues. Depending upon the outcome of these discussions, Technical are likely to proceed as above, or ask the DV for a full DOA report.
In cases where the DV is of the opinion that land let away is a factor in whether or not a property is of a character appropriate (IHTM24050) to the land (the property may only be considered of a character appropriate if let land is taken into account) Technical will take into account such factors as the length of the tenancies, their unexpired term and the intention or potential for the deceased or transferor to resume possession of the let land in deciding whether or not relief is due on the farmhouse or cottages.
We will always have regard to the advice of the DV on whether or not they consider a property qualifies as ‘agricultural property’ but the final decision rests with HMRC.