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HMRC internal manual

Shares and Assets Valuation Manual

Inheritance Tax: Teamworking Arrangements with the IHT Caseworker

Chapters SVM108110 and SVM108120 cover the situation where the IHT threshold is not breached so this section deals with cases where case is allocated to a valuer.

You should notify the IHT caseworker at the earliest possible opportunity of the following: -

  • If it is agreed or there is a strong possibility that BR is not due as claimed;
  • If we accept that 100% BR is due when it was not originally claimed;
  • If a meaningful adjustment in value is likely to be achievable;
  • If you discover that a previously undisclosed sum was due to an estate from the company or that a sum due is substantially greater than that shown on the Val 70. [You should bear in mind that sums due by way of loan account, undrawn dividends and so on do not qualify for business relief and are fully taxable. You should also inform the IHT caseworker of any possible omissions, for example, where a balance sheet shows sums due to directors but no breakdown is given. See this chapter at SVM108080]
  • If there is a change in relation to the instalment option being exercised by the taxpayers.

For example, you note from the Val 70 that the tax is being paid by instalments and interest relief has been claimed. If the company is an investment company, interest relief is not available and you should notify the IHT caseworker accordingly. Alternatively, tax on a deceased’s shares may be being paid by instalments and you are informed or discover that the company has been sold or the shares have been sold. The instalment option ceases on sale and you should notify the IHT caseworker. [See also this chapter at SVM108100.]

  • If you become aware of events which could affect the amount of IHT payable.

For example, where SAV has been asked to value for CGT purposes transfers to relatives/trusts within 7 years of a deceased’s death but we have only been asked to consider the value/ BR position at the date of death for IHT and not in relation to the lifetime transfers. Full details should be given to the IHT caseworker to consider any additional valuation requirements. [See also this chapter at SVM108190.]

Where you are reporting omissions or adjustments, you should inform the IHT caseworker how the adjustmentor omission came to light so that the caseworker can consider whether penalties are appropriate.

You should send an update every three months until the valuation is settled.

A case conference between the IHT caseworker, the SAV valuer and any specialist advisors is another tool to be considered in team working a valuation on an IHT case.

Depending on the circumstances of your valuation and the IHT requirements a case conference can be useful and can be arranged at any time.  However, once the SAV file has been open for 12 months you should contact the IHT case owner to arrange a case conference to discuss the issues and a way forward.  Depending on the circumstances of your case this may not be necessary, but should be considered.

A case conference should be viewed as an opportunity for the IHT caseworker and the SAV valuer to meet, assess all aspects of progress and decide on the most appropriate course of action. 

It is suggested that further case conferences take place at six monthly intervals after the initial case conference.

The IHT caseworker will prepare a note of each case conference and let you have a copy.  You should check it and correct any misconceptions.  The case conference will serve in lieu of a written update.

Specialist Cases

The processes mentioned above are principally aimed at valuers dealing with the valuation of unquoted shares. However, the same principles apply to valuations relating to specialisms such as foreign assets, underwriting interests and livestock / bloodstock. Specialist valuers should therefore follow the liaison procedures already detailed for unquoted shares. Where both unquoted shares and other assets are being considered by SAV, it will be the responsibility of the IHT caseworker to co-ordinate case conferences as necessary with the general team valuer and the specialist.

Specialists should particularly bear in mind the formal procedures in the IHTA for the requisition of information (see Chapter 118 of this manual at SVM118000).

Especially where the specialist valuation is the only outstanding matter, the IHT caseworker will want to form a view as to the amount of tax at stake and the prospective delay in achieving a settlement. The IHT caseworker may, therefore, ask the specialist valuer to provide a “best of judgement” valuation of the asset where the valuation has been outstanding for more than a year. The value the specialist is able to give will vary from a firm opinion of value based on all necessary information to a likely range of values where more information is needed. The valuer and the IHT caseworker will then decide whether the matter should be pursued further and, if so, how the valuation is to be taken forward.

  Additional Guidance: SVM150000