sale of house to son agreed two years ago, but contracts now. What value for CAT?

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ABank

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My friend agreed to sell a property he owned to his son who was renting the house in 2015. The sales price was agreed at 2015 level. He now wishes to draw up sales contract and complete the sale legally. The reason the sale was not completed at the time was that his son had to move abroad with his job and the sale was delayed. From a CGT & a CAT perspective can he use the 2015 selling price agreed or must the SP be at 2017 price level?
 
He can use any price he likes for the contract.

But the price for CGT and CAT would be the current market value.

If it were the value back in 2015, anyone could argue that they had agreed to sell the house at the price when it was lower.

Brendan
 
But Brendan we have seen that the current market value can be anything the valuer chooses to commit to paper as highlighted in the thread 'Selling farm following recent death resulting in CAT and CGT' and valuations can be influenced by the purpose of the valuation e.g. inheritance, sale, etc.

My reading of that thread is that getting the valuation you want, rather than an honest 'current market' value, would not take too much effort.
 
One could ask 3 valuers to value a house and get wide variability.

I would have thought that this is only possible within certain limits.

If it's in a street where similar houses are often sold, a significant undervaluation would probably prompt Revenue to have a look at it.

Brendan
 
Brendan Burgess said:
One could ask 3 valuers to value a house and get wide variability.

I would have thought that this is only possible within certain limits.

If it's in a street where similar houses are often sold, a significant undervaluation would probably prompt Revenue to have a look at it.

Brendan
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Materiality comes into play in these situations Brendan. If a property is valued somewhere within a reasonable ass's roar of a likely market value it's not likely to be worth Revenue committing the necessary resources to challenging it.

The specific form of words in Revenues CAT manual is that valuation is more art than science. There will always be a range of acceptable values within which the true market value resides. This introduces shades of grey, and there's cost and risk for both parties taking it all the way to Appeal Commissioner / Court. Hence they will start with most egregious outliers valuation-wise, and work from there. That's how I'd imagine it should be anyway, if they are using their own resources even remotely efficiently.
 
If the estate agents give you a valuation in writing then revenue will accept this.
 
john luc said:
If the estate agents give you a valuation in writing then revenue will accept this.
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Not necessarily. See my previous post. If it's not an off the wall unreasonable valuation and doesn't give them a concern that there's a worthwhile amount of tax at risk, then they'll accept it.
 
Don't bother with three valuers. Get one who has a good reputation for integrity and being prepared to stand over their work.
 
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