At Fallows, we specialise in CGT valuations for (Principal) Private Residence Relief (PRR) across Hampshire, Sussex, and Surrey. If you are disposing or gifting your main residence, our RICS Red Book reports ensure your valuation correctly reflects relief eligibility.

What is Private Residence Relief?

Private Residence Relief (PRR) can fully or partially exempt the capital gain from tax when a residential property has been your only or main home. The relief is proportional to the length of time you occupied the property, including the deemed occupation of the final 9 or 12 months of ownership, as well as actual living periods. Certain circumstances like gaps in occupation, multiple residences, or non-resident status may affect this eligibility.

Why a Proper PRR Valuation Matters

Valuing your property at the correct market rate as at the time of disposal or gift is critical. An accurate valuation underpinning PRR helps to:

  • Maximise your relief entitlement
  • Avoid HMRC disputes
  • Comply with reporting requirements for Capital Gains Tax

When You Gift Your Home but Continue Living There

If a parent gifts their home yet remains living in it (e.g., to a child), HMRC may perceive this as retaining a benefit, potentially voiding PRR eligibility. To avoid this, a formal rent agreement must exist, with market rent paid on time, and ideally reflected in your CGT valuation. We are often asked to include a Market Rent asessment in our valuations to help with the chain of evidence. 

Electing Between Homes

When owning multiple residences, you can nominate one property as your main residence for PRR , but this must be done within two years of your living arrangements changing. This decision can significantly impact your tax exposure.

Structured Valuation Services for PRR

Our valuation services include:

  • Fully RICS Red Book-compliant reports
  • Accurate valuation as at the date of disposal or gift
  • Inspections tailored to minimize cost and disruption
  • Whether you want a standalone PRR valuation or need a combined residential valuation plus rental value (for possible gift with reservation scenarios), we deliver clarity, accuracy, and reassurance.

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Frequently Asked Questions About Capital Gains Tax Valuations

Find answers to the most common questions executors, solicitors, and families ask about probate valuations and the inheritance tax process.

What is a Capital Gains Tax valuation and when is it needed?

A Capital Gains Tax valuation is an assessment of a property’s market value to calculate tax owed when the asset is sold, transferred, or gifted. It’s often required when disposing of property, selling an inherited home, or transferring assets between connected parties.

What is a historical property valuation for Capital Gains Tax?

CGT is a tax calculated on how the price of an asset has increased since you came to own it. A historical property valuation determines the value of a property at a specific date in the past if there isn't clear evidence of a purchase price. The valuation is often the date of acquisition or a key tax reference date such as 31 March 1982 so that capital gains can be calculated accurately.

How far back can HMRC request a historical valuation?

HMRC can require historical valuations going back many years and as far as 1982 depending on the asset’s ownership history. This might include valuation dates decades in the past, especially for long-held family properties or agricultural land.

Can HMRC challenge my Capital Gains Tax valuation?

Yes, HMRC can and does challenge valuations. If there is a significant difference between your valuation and theirs, they may request further evidence or refer the case to the Valuation Office Agency. Using detailed, evidence-based reports reduces this risk.

What information is needed for a CGT or historical valuation?

A valuer will typically require the property address, photographs, floor plans, land area, planning history, and details of any significant improvements since the relevant valuation date. For historical dates, local market evidence from that time will be researched by the Valuer.

How are improvements accounted for in a CGT calculation?

The cost of qualifying capital improvements (such as extensions or conversions) can be deducted from the gain, so accurate records and receipts are important.

Can a CGT valuation reduce my tax bill?

Yes, if carried out accurately and supported by evidence, a valuation can ensure you only pay tax on the actual gain. Overstating the value at acquisition (or understating at disposal) could result in paying more than necessary.