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HMRC internal manual

Inheritance Tax Manual

Investigating incorrect accounts, information or documents: consulting valuers

If there is an undervaluation you should always look to discuss the matter with Heritage, SAV or VOA (IHTM23002) when appropriate, before you decide to raise enquiries (IHTM36151) with the taxpayers. In some cases the VOA will, when sending you their report of an agreed valuation, provide factual background information and copies of any relevant documents about the initial valuation and the subsequently agreed increase.

You should not generally initiate any penalty investigation when interim increases have been notified to you by Heritage, SAV or VOA. This could prejudice the valuer’s attempts to settle the valuation by agreement. But there may occasionally be large or complex cases where the taxpayers want to reach a negotiated settlement which included all matters relevant to the valuation under negotiation. In these circumstances the valuer should liaise with you to consider any possible penalty implications before any agreement is concluded.

The role of the valuer is to advise you whether, based on information they hold, sufficient thought and care was taken in providing the original valuation and whether the value was defensible at the time it was made.

In no circumstances should you ask the valuers to raise enquiries into the undervaluation for you. Neither should you ask them to say whether they think the taxpayers were negligent - that is a matter for your judgement based on the advice they give and the answers the taxpayers give to any further enquiries that you choose to make.

Any opinions given by the valuers should not be divulged to the taxpayers. However, it would be proper to use any facts provided, for example, that the property had planning permission or planning permission had been applied for, or details of any correspondence or negotiations in progress before the account was delivered.