Tuesday, June 7, 2011

Another VI who aims to keep the price high

HMRC investigating property valuations

HM Revenues and Customs is targeting increased numbers of inheritance tax property valuations, according to an accountancy firm. UHY Hacker Young says HMRC has launched 9,368 investigations into inheritance tax valuations over the last year and is actively targeting estates and beneficiaries. It says that according to HMRC’s figures, £70m worth of additional tax was raised as a result of HMRC challenging the valuations of properties included in the estate of a deceased person in 2010. .In cases where additional tax was payable, this averaged £24,600 per case.

Posted by jack c @ 12:21 PM (2039 views)
Please complete the required fields.



11 thoughts on “Another VI who aims to keep the price high

  • mark wadsworth says:

    Jack C, don’t tempt me…

    Reply
    Please complete the required fields.



  • MW – I wonder what sort of replacement tax might fit the bill ? – you could maybe scrap SDLT at the same time.

    Reply
    Please complete the required fields.



  • mark wadsworth says:

    Jack C, as I like to say, IHT is a distressing and haphazard random jealousy surcharge which raises a paltry £3 bn per annum, slightly less than the TV licence fee – which is in turn a savage poll tax on single people, esp. those with low incomes (and the collection costs of which are about ten per cent). But luckily the unfairness of these two taxes more or less cancels out. Add the two together, gives us £6 billion a year, another £6 billion or so for SDLT (a tax which is also a jealousy surcharge which discourages efficient allocation of resouces) and we get £12 billion a year.

    Ho hum, the total value of resi land and buildings is about £4 billion, I wonder what sort of annual rate you’d need to apply to be able to replace the above three taxes in their entirety? About 0.3%?

    Reply
    Please complete the required fields.



  • Numbers indicate that ony 30% of the investigations yielded an under-valuation, yet those they caught were on average trying to undervalue by over £100k.

    Rather suggests that HMRC are selecting investigation targets randomly, and should induge a little pre-screening before launching formal investigations.

    Reply
    Please complete the required fields.



  • mark wadsworth says:

    In real life I had enormous fun with this one – HMRC threatened client with a 100% penalty surcharge for deliberate undervaluation (which was not true – in any event, the executors sold the asset shortly thereafter, so the lower probate value gave a correspondingly higher CGT charge so it was six of one or half a dozen of the other and very little in extra tax due, overall) and so I told HMRC to whistle for it as this is a criminal penalty which you cannot impose for a civil offence (and/or, you have to give the accused the right to remain silent and not co-operate with their stupid investigation) and they cancelled the penalty forthwith.

    Reply
    Please complete the required fields.



  • ontheotherhand says:

    MW, this reminded me to ask about the effect LVT might have on the mixing of society. I think it was Harold Wilson who purposefully mixed society by building council houses in smart areas. If LVT efficiently allocates housing resources with the best amenities to those willing to pay, eventually won’t you either end up with a very split society, or council house/housing benefit recipients where the benefit is so valuable they have no incentive to work.
    BTW my brother who works in a huge institution had a team secretary that was very good, if only having to struggle occasionally as a single mother with half terms and sickness. She came to them and asked if she could reduce her hours so that she could get the best benefits including housing. They said ‘No’ and so this very skilled person has decided to do 16 hours a week at Morrisons instead and gets a better net income and housing as well as many times more free hours.

    Reply
    Please complete the required fields.



  • mark wadsworth says:

    OTOH, re “mixing”, there is of course a basic trend that wealthier people tend to live in nicer areas. For sure, there are lower income people in areas which are since gentrified, but if they sell up, of course they sell up to wealthier people.

    If all plots were the same size, then we’d get the same effect with LVT, only speeded up (so this is not something that overly concerns me), but all plots are clearly not the same size – anybody can stay in the area to which they grown accustomed, it’s just that if their income falls, they move from a detached to a semi, or from a semi to a terraced, or from a terraced to a small block of flats, or from a small block of flats to a towerblock (the tax on a detached being ten or twenty times as much as the tax on a flat in a tower block).

    Council Housing is a sticking plaster, in the long run, we wouldn’t really need it, as by definition everybody gets a CI equivalent to the rent on an median home. As a hard hearted sort of person, this is why I don’t see a problem with HB payments being reduced so that very low and non-income people have to move out of the nicest areas, I’m not weeping for Poor Widows In Mansions and neither will I weep for Unemployed People In Westminster.

    Reply
    Please complete the required fields.



  • ontheotherhand says:

    Hmmm. Very tricky. I can see how having working successful people mixed with those who didn’t get the best start in life might set a good example and encourage effort, and it might engender a bit of local compassion and understanding in those who have made a success. Then again it might not and this social engineering is an expensive misallocation of resources. I’m not sure.

    Reply
    Please complete the required fields.



  • 7. mark wadsworth said…I’m not weeping for Poor Widows In Mansions and neither will I weep for Unemployed People In Westminster.

    Pfff. You aint winning an election then.

    Reply
    Please complete the required fields.



  • mark wadsworth says:

    Inbreda: “You aint winning an election then.”

    Nope.

    Reply
    Please complete the required fields.



  • @ontheotherhand

    I saw an interview with Lee Kuan Yew some months back, whilst he has his detractors he came across as very reasoned. He seemed to imply that social engineering played a positive role in Singapore’s success though at the same time one countries approach will not always be relevant to others. I guess the higher perceived reward given Singapore’s history was the determining factor there.

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>