Recent Budget announcements on Agricultural Property Relief and Business Property Relief

Announcements regarding Agricultural Property Relief (APR) and Business Property Relief (BPR) in the recent Autumn Budget on 30 October 2024 from Chancellor Rachel Reeves have led to some queries into RICS from valuer members regarding the use or otherwise of the Material Valuation Uncertainty (MVU) declarations for valuations of agricultural land and farms. By way of backdrop to the queries, within the Budget it was announced that from 6 April 2026, the full 100% relief from Inheritance Tax (IHT) will be restricted to the first £1 million of agricultural and business property combined. Above this amount, landowners will pay IHT at a reduced rate of 20%, rather than the standard 40%. This tax can be paid in instalments over 10 years interest free, rather than immediately, as with other types of IHT.

A detailed response to any valuation question depends on the jurisdiction, the asset/liability being valued and the purpose of valuation. There is a level of uncertainty in all valuation. Global Red Book Standards set out terms of engagement, inspection, investigation and reporting requirements to support the delivery of accurate valuations that reflect the relevant circumstances.

Material Valuation Uncertainty is a specific term for which there is specific information and best practice at Red Book Global Standards VPGA 10 and reporting requirements at VPS 3 paragraph 2.1(o). The difference between MVU as set out in VPGA 10 and general uncertainty and relevant market conditions commentary should be noted.

RICS reminds regulated members that the decision whether to insert, maintain or remove commentary that a valuation is materially uncertain is that of the valuer, considering the specific attributes and performance of the individual asset and its market. Regulated members should consider on a case-by-case basis whether it would be appropriate to include commentary that a valuation is materially uncertain. They should have a sound rationale for the decision they reach upon such consideration and should maintain a record of that rationale for future reference.

RICS also reminds regulated members that they should reference any general uncertainties and any relevant commentary on market conditions that they may have within their report commentary and that may also include commentary regarding keeping the valuation under review - that again will be the decision of the valuer.

RICS does not accept any responsibility, duty or liability to any party in respect of the contents of their output. Any such responsibility, duty or liability is expressly disclaimed. RICS shall therefore not be held accountable for any losses relating to or arising out of a valuer’s decision to insert, maintain or remove any declaration of material valuation uncertainty.