Do You Need a RICS Valuation for Capital Gains Tax?

You need a RICS valuation for Capital Gains Tax whenever there is no genuine open-market sale price to plug into your calculation. That covers gifts, transfers to family members, inherited property without an agreed probate value, disposals at below-market prices, and any property held before 31 March 1982. A valuation from a surveyor regulated by the Royal Institution of Chartered Surveyors carries the professional weight HMRC expects, and it protects you from overpaying tax, underpaying and being penalised, or ending up in a dispute with HMRC’s own valuers.

If you bought on the open market and later sold on the open market, the two prices are your figures and no valuation is needed. The question only arises when one side of the calculation is missing a real price.

When a Valuation Is Actually Required

Under the Taxation of Chargeable Gains Act 1992, any disposal that falls outside a genuine arm’s-length transaction is treated as if it happened at market value.¹ That catches gifting property to a family member, transferring it into a trust, or selling to someone at a deliberately low price.

Transfers to “connected persons” are always deemed to happen at market value regardless of what actually changed hands. Connected persons include your spouse or civil partner, siblings, parents, grandparents, children, grandchildren, and the spouses or civil partners of those relatives. The definition does not extend to uncles, aunts, nieces, or nephews.²

Inherited property is the other common trigger. When someone dies, the property’s base cost for future CGT resets to its market value at the date of death. If the estate paid inheritance tax and a value was formally agreed for that purpose, that same figure is used for CGT.³ If no formal probate valuation was done, you’ll need a retrospective valuation for the date of death before you can work out the gain on a later sale.

Check Whether Private Residence Relief Solves the Problem First

Before you instruct anyone, work out whether you owe CGT at all. If the property was your only or main residence throughout your entire period of ownership, private residence relief exempts the full gain from CGT.⁴ No gain, no tax, no valuation needed.

Partial relief applies when the property was your main home for only part of the ownership period, when part of it was used exclusively for business, or when the grounds exceed half a hectare and the extra land isn’t needed for reasonable enjoyment given the property’s size and character.⁴ In those cases a RICS valuation may still be needed to apportion the gain between the exempt and taxable portions. The final nine months of ownership always qualify for relief if the property was your main residence at some point. Talk to a tax adviser before commissioning a surveyor so you know exactly which figures the valuation has to establish.

The 31 March 1982 Rebasing Rule

If you or a previous owner held the property before 31 March 1982, its original purchase price is usually irrelevant. The law treats the property as sold and repurchased at its market value on that date, and your CGT calculation uses that 1982 figure as the starting point.⁵ This stops you being taxed on decades of growth that accumulated before the modern CGT regime existed.

Producing an accurate 1982 valuation is one of the hardest jobs a surveyor takes on. Comparable sales evidence from over forty years ago is thin, and the surveyor has to reconstruct local market conditions from limited records. HMRC knows the difficulty and expects a carefully reasoned figure rather than a guess. The more supporting evidence the surveyor can assemble, the less likely HMRC is to push back.

There is a safety net. If using the 1982 value would turn what would otherwise be a gain into a loss, or a loss into a gain, the calculation is adjusted so that neither arises.⁵ You can also elect to have all your disposals use the 1982 value automatically, which simplifies record-keeping if you hold several pre-1982 assets.

How the Valuation Feeds Into Your Tax

The valuation slots into a simple formula. Take the disposal value (the sale price, or market value if no arm’s-length sale occurred), subtract your base cost (purchase price, or the valuation at the relevant date), subtract allowable expenditure, and subtract your annual exempt amount. What remains is the chargeable gain.

For the 2025–26 tax year, the annual exempt amount is £3,000.⁶ Basic-rate taxpayers pay CGT at 18% on residential property gains; higher-rate and additional-rate taxpayers pay 24%.⁷ Every pound a professional valuation legitimately adds to your base cost directly reduces the taxable gain.

“Market value” has a precise statutory meaning: the price the property might reasonably be expected to fetch on a sale in the open market.⁸ That assumes a willing buyer and a willing seller, neither under pressure. The surveyor’s job is to work out that hypothetical price for the specific date in question.

What to Have Ready for the Surveyor

Having the paperwork ready before the surveyor visits saves time and produces a more defensible result. The essentials are:

Title deeds or Land Registry documents showing legal boundaries, ownership history, and any rights or restrictions.
The exact date you acquired the property, the date of the triggering event (gift, death, transfer), and the proposed or actual disposal date.
For leasehold properties, the remaining term and ground rent, because a short lease dramatically affects value.
Invoices, building regulation certificates, planning permissions, and architect drawings for any capital improvements.

Missing records force the surveyor to make assumptions, and assumptions invite challenge from HMRC. If you cannot find original paperwork, your local authority’s building control department may hold copies of approved plans, and the Land Registry can provide historical title information.

What a Valid Report Must Contain

A valuation prepared for CGT must comply with RICS Valuation – Global Standards, known as the Red Book, which are mandatory for RICS members and RICS-regulated firms providing written valuations.⁹ The current edition aligns with the International Valuation Standards published in January 2024 and took effect on 31 January 2025.

At minimum, a compliant report should include:

A statement that it is prepared for Capital Gains Tax purposes.
An effective valuation date that matches the date of the taxable event, not the date the surveyor visited.
Confirmation that the basis of valuation aligns with the statutory definition of market value.
The specific comparable properties and sale prices used to support the figure, with adjustments explained.
The surveyor’s qualifications and signature, confirming the competence and independence required by the Red Book.

Reports that skip any of these elements risk being dismissed if HMRC opens an enquiry. The comparable evidence section is the part HMRC scrutinises most closely. A bare conclusion with no supporting data is treated as opinion, and HMRC’s Valuation Office Agency will replace it with their own figure.

Getting HMRC to Agree the Figure Before You File

You can ask HMRC to review your valuation before you file your return using form CG34. You submit the valuation, HMRC passes it to the Valuation Office Agency, and they tell you whether they agree.¹⁰

If HMRC agrees, they won’t question that valuation when it appears on your return. If they disagree, they’ll propose an alternative and negotiate. Either way, you know where you stand before committing to a figure.

You must submit the CG34 application at least three months before your tax return filing deadline. For UK residential property disposals, the separate 60-day reporting requirement still applies, so you may need to file an estimated return and amend it once the CG34 check is complete.¹⁰

The 60-Day Reporting Deadline

If you dispose of UK residential property and CGT is due, you must report and pay within 60 days of completion.¹¹ The deadline applies to sales, gifts, and transfers where a gain arises. Waiting for the end of the tax year isn’t an option.

Commissioning a professional valuation takes time, so if the report isn’t ready within 60 days, file an estimated return using the best figure you have and amend it once the valuation arrives. Late filing attracts penalties, and waiting for a valuation is not a defence HMRC accepts.

What Happens If HMRC Disagrees

HMRC doesn’t accept every valuation it receives. The Valuation Office Agency employs its own chartered surveyors who review figures that look questionable. If they think yours is wrong, they’ll propose an alternative and try to negotiate.

If no agreement is reached, they issue an unagreed valuation, and HMRC treats their figure as final for the assessment. You then have the right to appeal.¹²

Where the dispute is purely about what a property was worth, the case goes to the Lands Chamber of the Upper Tribunal (formerly the Lands Tribunal) in England and Wales. If the dispute involves both the valuation and an underlying question about the tax treatment, it may first go to the First-tier Tribunal (Tax Chamber), which can then refer the valuation question to the Lands Chamber.¹²

A well-prepared RICS report with strong comparable evidence makes disputes far less likely. The cases that reach tribunal usually involve valuations with weak or missing evidence, retrospective dates where market data is thin, or figures that are visibly optimistic. Spending more upfront on a thorough valuation is almost always cheaper than fighting HMRC later.

1
Legislation.gov.uk. Taxation of Chargeable Gains Act 1992 – Part VIII
2
GOV.UK. CG14580 – Connected Persons
3
Legislation.gov.uk. Taxation of Chargeable Gains Act 1992 – Part VIII, Section 274
4
Legislation.gov.uk. Taxation of Chargeable Gains Act 1992 – Section 222
5
Legislation.gov.uk. Taxation of Chargeable Gains Act 1992 – Section 35
6
GOV.UK. Capital Gains Tax – Rates and Allowances
7
GOV.UK. Capital Gains Tax Rates and Allowances
8
Legislation.gov.uk. Taxation of Chargeable Gains Act 1992 – Part VIII, Section 272
9
Royal Institution of Chartered Surveyors. RICS Valuation – Global Standards (Red Book)
10
GOV.UK. Post Transaction Valuation Checks for Capital Gains (CG34)
11
GOV.UK. Report and Pay Your Capital Gains Tax – UK Property
12
GOV.UK. CG74500 – Unagreed Valuation