Capital Gains Tax Valuation

A property valuation for Capital Gains Tax may be needed when the price paid or received is not the figure HMRC requires for the calculation. HMRC normally uses the actual proceeds, but market value is used in specified situations. A RICS valuation provides independent evidence for the relevant date; your tax adviser uses it when calculating and reporting the gain.

Common situations include:

• Gifts and transfers at undervalue
  Market value may be used at the date of the gift or disposal. Special rules apply to transfers between spouses or civil partners and gifts to charity.
• Inherited property
  Beneficiaries generally use the market value at the date of death, or an agreed Inheritance Tax value where applicable, as their acquisition value.
• Property owned before April 1982
  A valuation at 31 March 1982 may be needed when establishing the allowable base cost.
• Transactions between connected parties
  Market value can replace the stated price when calculating the gain.

Selling a London property does not automatically create a Capital Gains Tax charge. A main home may qualify for Private Residence Relief, while buy-to-let property, second homes, inherited property and other disposals can require a gain to be calculated. Allowable costs, losses, reliefs and the annual exempt amount can all affect the result.

You do not automatically submit a valuation report to HMRC. After a disposal, you can ask HMRC to check a valuation before filing by submitting form CG34 and allowing at least three months for a response. Harding provides the independent property valuation; we do not calculate tax or submit tax returns. Your accountant or tax adviser should confirm the correct treatment and deadlines.

Capital Gains Tax is charged on a taxable gain, not on the full selling price. The calculation normally starts with the disposal proceeds, then deducts the acquisition cost and allowable expenditure. Available reliefs, allowable losses and the annual exempt amount are applied before the tax rate is determined.

A disposal can include:

• Selling a property
• Exchanging it for another asset
• Giving it away, subject to special rules for spouses, civil partners and charities
• Receiving compensation, such as certain insurance payments

For disposals from 6 April 2026, individuals generally pay 18% on gains falling within the unused basic-rate band and 24% above it. The 2026–27 annual exempt amount is £3,000 for most individuals and personal representatives, and £1,500 for most trustees. Different rules can apply to companies, non-UK residents and gains qualifying for a specific relief. Check the current HMRC Capital Gains Tax rates with your tax adviser.

Any Capital Gains Tax due on a UK residential-property disposal must generally be reported and paid within 60 days of completion. Self Assessment reporting may also be required. See HMRC’s property-reporting guidance for the current rules.

An allowable loss does not itself create a tax charge. It is normally deducted from gains in the same tax year, and unused allowable losses may be carried forward subject to HMRC’s rules.

An independent Capital Gains Tax valuation can help you:

• Establish the relevant market value
  Obtain an impartial opinion of value at the required disposal, gift, death or historic valuation date.
• Document the evidence
  Provide a clear record of the property, valuation assumptions, comparable transactions and conclusion.
• Support your tax adviser
  Give your accountant or adviser a professionally prepared figure for their calculation and return.
• Respond to HMRC questions
  Retain a reasoned report that explains how the market value was reached if HMRC reviews it.