The Commissioners for HMRC v LG Park HT1 Limited & Ors
[2023] EWCA Civ 1193
Chifley Holdings Ltd (BVI) v The Commissioners For HMRC
25 September 2024
[2024] UKUT 301 (LC)
Upper Tribunal
A court case decided the value of a London house. Two experts disagreed on the value. The judge looked at similar houses sold nearby and decided the house was worth £11.75 million, not the lower amount the owner claimed.
Key Facts
- •Appeal against HMRC's determination of the freehold value of 12 Chester Square, London (£10-20 million ATED bracket).
- •Appellant (Chifley Holdings Limited) claimed a value of £9,325,000.
- •Valuation date: 1 April 2017.
- •Chequered procedural history with multiple expert witness changes and adjournments.
- •Decision based on written representations and expert evidence from Mr David Nesbit (Appellant) and Mr Peter Alderton (HMRC).
- •Experts agreed on five comparable transactions, with additional comparables used individually.
- •Key disputes: choice of index (Land Registry vs. Savills), treatment of post-valuation date evidence, and valuation of garage space.
- •Tribunal conducted an external inspection of the appeal property.
Legal Principles
Market value is determined as defined by s.272(1) of the Taxation of Chargeable Gains Act 1992: the price reasonably expected on a sale in the open market.
s.98(8) Finance Act 2013
Post-valuation date evidence can be used to confirm the state of the market around the valuation date, but carries less weight with increased time since valuation. Events after the valuation date that wouldn't have been known at the time should be disregarded.
Allen v Leicester City Council [2013] UKUT 22 (LC), Castlefield Property Limited v National Highways Limited [2023] UKUT 217 (LC), Segama v Penny Le Roy [1984] 1 EGLR 109, Melwood Units Pty Limited v Commissioners of Main Roads [1979] AC 426, Bishopsgate Parking (No.2) Limited v The Welsh Ministers [2012] UKUT 22 (LC)
RICS guidance on comparable evidence should be followed as best practice, although deviations might be acceptable.
RICS Guidance Note “Comparable evidence in real estate valuation” (2013, updated 2019, 2023)
In adjusting comparable sales, the order of adjustments matters when some are percentages and some are fixed amounts. Non-physical factors (time, relativity) should be adjusted first, followed by physical factors (condition, location).
The Earl Cadogan v Faizapour and Stephenson [2010] UKUT 3 (LC), The appeal of Sinclair Gardens Investments (Kensington) Limited [2017] UKUT 0494 (LC)
Outcomes
The market value of the appeal property at 1 April 2017 is determined to be £11,750,000.
Based on analysis of seven comparable transactions, adjusting for time using the Savills Central London House Index, condition, and other relevant factors. The Tribunal rejected certain comparable transactions due to issues with their reliability and time distance from the valuation date.