Inheritance Tax: Teamworking Arrangements with the IHT Caseworker - Case Conferences
A case conference should be viewed as an opportunity for the SAV valuer and the IHT caseholder to meet, assess all aspects of progress and decide on the most appropriate course of action.
A case conference should be regarded as mandatory if a case has not been settled within 12 months of referral to SAV. Case conferences can be arranged at any time and are encouraged in complex cases or where the tax consequences are unclear.
Those attending should prepare well in advance so that informed views can be reached on:
- The tax implications - both the valuer and the caseworker should be fully aware of the tax implications of what they are trying to do. A key aim of the case conference is to decide whether the tax at stake, or the precedent setting value, justifies further compliance action.
- Cases which have been referred to the Valuation Office Agency (VOA) - prior to a case conference the latest position should be ascertained from the VOA. Find out how far apart the parties are and how confident the VOA is of his opinion. If the case went to appeal, what value would the VOA defend? Find out if there is any outstanding information which it might be possible to obtain by the IHT caseworker issuing an Information Notice. If the case warrants it, be prepared to arrange for the VOA to be at the case conference.
- Ongoing Risk Assessment - remember that a large difference of opinion over the value of land/property may have only a minimal impact on the value of a minority shareholding. Consider recalling the case from the VOA and trying to reach a pragmatic settlement which factors in all the other uncertainties inherent in valuing shares. Even if the value offered is felt to be wrong there could be so little tax at stake that a without prejudice agreement may be in order. However, where you accept a value on pragmatic grounds that you consider to be lower (but not higher) than market value, the parties should be informed that although the acceptance is made on a without prejudice basis, the value will nevertheless be ‘ascertained’ as the acquisition value for CGT purposes.
- Joint meetings - if the outcome is likely to be productive for the case as a whole, consider with the IHT caseholder holding a joint meeting with the taxpayer and/or their agent.
- The use of Information Powers - consider whether delays are being caused by a lack of information. If so, decide if it is appropriate to issue an Information Notice. This applies to any outstanding information needed to progress the case, whether it be required by the VOA or SAV. See Chapter 118 of this manual SVM118000.
Where we have sufficient information on which to base an opinion of value, SAV will remain responsible for making the decision to issue a Notice of Determination (NOD) (s.221 IHTA - see Chapter 118 of this manual SVM118000). Before making that decision, the Appeals Team should be consulted; we should discuss our proposed course of action with the IHT caseworker at a case conference; and ensure that we know precisely the amount of tax at stake. The IHT caseworker may be asked to draft and issue the NOD but its terms and the timing of its issue must have been approved by SAV.
The IHT caseworker has overall responsibility for the conduct of the enquiry. The purpose of case conferences is to keep him/her informed of SAV’s progress and of any difficulties we encounter. They provide a means for exchanging information, which will lead to greater understanding on both sides.
Note that the IHT valuation should not be considered in isolation. Where we are considering the value of shares for the purposes of both IHT and other taxes, our approach should be based on the whole picture - and if we have concerns regarding the non-IHT valuations, these should be explained to the IHT caseworker.
|Additional Guidance: SVM150000|