Hope value

Valuation of property for probate

The taxpayer was the son and personal representative of the deceased. He inherited his father’s property a two-floor maisonette in north London and a dispute arose as to its value for probate (IHTA 1984 s 160). He instructed Mr B who valued the shared freehold at £1.4m at August 2012. The deceased’s interest was £1.237m. The property was sold in March 2014 for £2.525m.

Mr B maintained his valuation saying it had not incorporated hope value because it was not mentioned in the Royal Institution of Chartered Surveyors Red Book the property had several ‘negatives’ such as ‘an awkwardly accessed shared communal north facing garden’ and the estate agent that sold it had ‘got lucky at a good time in the market’.

The HMRC valuer considered the entire freehold value was £2.3m at August 2012.

The Upper Tribunal (Lands Chamber)...