IHT valuation of house in disrepair

It is a fundamental principle of IHT that the tax liability consequent upon the death of a property owner must be based upon the market value of the property comprised in the estate of the deceased. The market value must be the price that would be paid by a willing buyer to a willing seller. Self-evidently that price must reflect the state of the property at the valuation date. Often the deceased will have been elderly, and the property requiring valuation will be the dwelling house in which he lived prior to his death. Very possibly, it will have fallen into a state of some disrepair, which will not have been apparent to the deceased on account of his deteriorating faculties, or he will have been reluctant or unable to afford to meet the cost of repairs. The starting point for the valuation may be the price that the property would fetch if sold in good condition, which can then be adjusted downwards to allow for the actual condition at the statutory valuation date. The process may be made more difficult if, in fact the District Valuer is only able to inspect the property some time after the death, when repairs have been carried out. These, and other difficulties faced the Land Tribunal in Tapp v HMRC 2008 EW Lands TMA/284/2008.