LBTT2016 - Meaning of market value

LBTT guidance on determining the chargeable consideration in a land transaction where the market value of land or buildings is required to be used.

The market value of land or buildings is the price that might reasonably be expected to be fetched in a sale between a willing buyer and willing seller in the open market. The definition is derived from the definitions set out in sections 272 to 274 of the Taxation of Chargeable Gains Act 1992


LBTT(S)A 2013 section 62

Where the consideration for a land transaction is satisfied by the provision of services or other non-monetary consideration, the market value of those services will be the amount they might reasonably be expected to have cost if purchased at arm’s length on the open market.

LBTT(S)A 2013 schedule 2 paragraph 12

The market value of land and buildings does not include Value Added Tax (VAT) even if VAT is chargeable on the transfer of the asset. This is because market value is based on a hypothetical transaction, not on the actual transaction.

If a transaction requires a valuation it is the buyer’s responsibility to provide it - we are not responsible for obtaining or preparing valuations on behalf of a buyer.

An acceptable valuation of land and buildings may require the input of someone with professional qualifications. We may employ professional valuers to check valuations or apportionments.

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