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Referral of questions of land valuation 

 

Chargeable gains

"(1)     In so far as the question in dispute on an appeal to which this section applies—

(a)     is a question of the value of any land or of a lease of land, and

(b)     arises in relation to the taxation of chargeable gains (whether under capital gains tax or corporation tax) or in relation to a claim under the 1992 Act,

the question shall be determined by the relevant tribunal.

(2)     This section applies to—

(a)     an appeal against an amendment of a self-assessment under section 9C of this Act or paragraph 30 of Schedule 18 to the Finance Act 1998;

(aa)     an appeal against an amendment of a return under paragraph [34]4 of Schedule 18 to the Finance Act 1998;

(b)     an appeal against a conclusion stated or amendment made by a closure notice under section 28A or 28B of this Act;

(c)     an appeal against an amendment of a partnership return under section 30B(1) of this Act;]2

(d)     an appeal against an assessment to tax which is not a self-assessment;

(e)     an appeal against [a conclusion stated or amendment made by a closure notice under paragraph 7(2) of Schedule 1A to this Act relating to a claim or election made otherwise than by being included in a return;

(f)     an appeal against a decision contained in a closure notice under paragraph 7(3) of Schedule 1A to this Act disallowing in whole or in part a claim or election made otherwise than by being included in a return." (TMA 1970, s.46D(1) - (2))

 

Relevant tribunal

(3)     In this section “the relevant tribunal” means—

(a)     in relation to land in England and Wales, the Upper Tribunal;

(b)     in relation to land in Scotland, the Lands Tribunal for Scotland;

(c)     in relation to land in Northern Ireland, the Lands Tribunal for Northern Ireland." (TMA 1970, s.46D(3))

SDLT

"(1)     Where the question in any dispute on any appeal under paragraph 35(1) is a question of the market value of the subject matter of the land transaction that question shall be determined on a reference by the relevant tribunal." (FA 2003, Sch 10, para 45(1))

Relevant tribunal

"(2)     In this paragraph “the relevant tribunal” means—

(a)     where the land is in England, the Upper Tribunal;

(b)     ...

(c)     where the land is in Northern Ireland, the Lands Tribunal for Northern Ireland." (FA 2003, Sch 10, para 45(2))

IHT

IHTA 1984, s.222(4) - (4B)

Referral of questions of land valuation 

Valuing interest in partnership with land assets is a question of valuing land

 

“As between themselves, partners are not entitled individually to exercise proprietary rights over any of the partnership assets. This is because they have subjected their proprietary interests to the terms of the partnership deed which provides that the assets shall be employed in the partnership business, and on dissolution realised for the purposes of paying debts and distributing any surplus. As regards the outside world, however, the partnership deed is irrelevant. The partners are collectively entitled to each and every asset of the partnership, in which each of them therefore has an undivided share. It is this outside view which identifies the nature of the property falling to be valued for the purpose of capital transfer tax, although in accordance with the  principle the restrictions imposed by the partnership deed must be taken into account in assessing its value (see  [1960] 1 WLR 1027). In my judgment, therefore, Lady Fox had for the purposes of s 38 a 92·5% interest in the tenancy which the Lands Tribunal had jurisdiction to value as an interest in land.” (IRC v. Gray [1994] STC 360 at 377, Hoffmann LJ)

Valuing interest in partnership with land assets is a question of valuing land

Referral of question of apportionment 

 

"[52]...we agree with Mr Baldry that in any event any issue as to apportionment could most appropriately be determined by the Lands Chamber as an aspect of determining the valuation of the Plot Leases." (LG Park HT1 Ltd v. HMRC [2022] UKUT 178 (TCC), Adam Johnson J and Judge Thomas Scott)

Referral of question of apportionment 

Referral is mandatory

 

"[40] First, it is engaged only where an appeal which has been made, and in relation to that appeal. The particular appeal, and the FTT’s jurisdiction in relation to it, therefore form the framework within which paragraph 45 falls to be applied.  

[41] Second, its effect is mandatory. Any question of the market value of the land transaction must be determined on a reference by the Lands Tribunal. That requirement applies where the question arises “in any dispute on any appeal”. Thus the primary purpose and effect of paragraph 45 may be seen as jurisdictional." (LG Park HT1 Ltd v. HMRC [2022] UKUT 178 (TCC), Adam Johnson J and Judge Thomas Scott)

Referral is mandatory

Referral is not the same as transferring the appeal

 

"[42] Third, it is not the appeal which is transferred to the Lands Chamber but the question of valuation. The appeal remains with the FTT." (LG Park HT1 Ltd v. HMRC [2022] UKUT 178 (TCC), Adam Johnson J and Judge Thomas Scott)

Referral is not the same as transferring the appeal

Referral does not require valuation to be the only remaining issue

 

"[58] First, in our opinion there is nothing in the terms of paragraph 45 which requires or has the result that a reference can be made only when the FTT has determined all issues or questions in the appeal other than valuation. When paragraph 45 refers to “the question in any dispute on any appeal” being market value, it is not restricting the requirement for a reference to a situation when that is the only question in dispute. That would be inconsistent with the principles which we have identified as underpinning paragraph 45. All that the reference to “dispute” is doing is to make clear that it is only where valuation is not agreed between the parties (and is therefore a question in dispute) that a reference is required to determine that question." (LG Park HT1 Ltd v. HMRC [2022] UKUT 178 (TCC), Adam Johnson J and Judge Thomas Scott)

Referral does not require valuation to be the only remaining issue

For the party opposing referral to identify and establish other questions

 

"[49] In evaluating against this background whether there were other questions in the appeal, taking into account the observations we have made about the purpose and operation of paragraph 45 it was not a sufficient ground to refuse the application that the FTT might decide in the substantive hearing to determine issues other than valuation.    

[50] Nor was it a sufficient ground in itself to justify a refusal that the parties disagreed on the scope of the Closure Notice. On any reasonable basis, valuation was clearly front and centre of both the Closure Notice and the appeal against it. It was for the party opposing the reference application to identify and establish that specific questions in addition to valuation arose in the appeal." (LG Park HT1 Ltd v. HMRC [2022] UKUT 178 (TCC), Adam Johnson J and Judge Thomas Scott)

For the party opposing referral to identify and establish other questions
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