Robust valuation reports essential tool in future

Changes to APR (Agricultural Property Relief) and BPR (Business Property Relief) announced in 2024 and 2025 are now weeks off implementation from April 2026 onwards. As a result, it is more important than ever before that we ensure detailed, robust valuation reports, writes Balfours partner, Bryn Hill, MRICS FAAV.

Just as the changes to APR and BPR have sent a shockwave through the farming community and will make a significant difference, the 2023 budgets included additional funding for HMRC to investigate tax avoidance: Equating to a two-way pincer movement to boost tax revenues.

Valuers are now witnessing the result of this with additional focus on investigating more fully capital tax returns. We must now buckle down with the realisation that this will likely be the new norm.

Historically we have not included in probate valuations plant, machinery, livestock, or deadstock. Values recorded in the farm accounts were simply submitted in the knowledge that they would qualify for 100% BPR. However, with caps now being introduced for APR and BPR we will need to ensure accurate market valuations of these business assets are included in future valuations.

We are already finding that we are needing to expand our valuation reports to pick up on issues or explain circumstances to HMRC that their teams are not familiar with or necessarily regularly encountering. It is worth reminding you of the regular enquiries we see, namely: challenges from the district valuer regarding the appropriate size of farmhouses and more investigations where APR has been claimed for an owner who is not farming land in hand.

I do bring you a silver lining, that if the valuation needs to be referred to again in the future, with a detailed “Red Book” valuation all the evidence and circumstances at the time of the valuation are held in the one document.

HMRC changes over the last three years endorse the need to gather a qualified team around you. Understanding these issues is fundamental to our tax and probate work at Balfours: By working with clients, their solicitors and accountants we have been able to achieve a good track record of fending off challenges from HMRC. If you would like to discuss matters brought to light in this article please do call Bryn or email in confidence: 07500 867565, brynhill@balfours.co.uk