Valuation of Property for Capital Gains Tax in Surrey: What You Need to Know
When it comes to selling or transferring property in the UK, Capital Gains Tax (CGT) can become a significant financial consideration. This is particularly true for property owners in Surrey, where the market is often buoyant and property values have risen sharply over the years. Understanding how the valuation of property for Capital Gains Tax works is crucial if you want to stay compliant with HMRC and avoid costly miscalculations.
Whether you're selling a second home, gifting a property, or disposing of an inherited asset, this comprehensive guide will walk you through how Capital Gains Tax applies, when a valuation is needed, and how to get one done properly.
What is Capital Gains Tax?
Capital Gains Tax is a tax on the profit you make when you sell (or 'dispose of') an asset that has increased in value. The “gain” is the difference between what you paid for the asset and what you sold it for.
In the context of property, CGT generally applies to:
Second homes
Buy-to-let properties
Inherited properties that have increased in value
Properties transferred as gifts (outside of spousal transfers)
Your primary residence is usually exempt, thanks to Private Residence Relief, but second properties and investment assets are subject to CGT.
Why is a Valuation of Property for Capital Gains Tax Required?
A valuation of property for Capital Gains Tax is essential for determining the correct gain — and therefore the correct amount of tax payable. HMRC may ask for a “market value” at the time of acquisition or disposal, particularly if:
The property was acquired before April 1982 (in which case the market value as of that date is used)
The property was inherited (where market value at the date of death is used)
The property is being gifted or transferred (where no money changes hands)
There is a dispute or lack of documentation about the purchase price
In these situations, a professional, RICS-compliant valuation is often required to avoid later disputes with HMRC.
How Capital Gains Tax Works in the UK (2025 Update)
As of the 2025 tax year, the Capital Gains Tax annual exemption has been reduced to £3,000 per individual (£6,000 for couples). This means that any gains above that amount may be taxed at:
18% for basic-rate taxpayers
28% for higher and additional-rate taxpayers
For residential property, these rates apply to the gain after deducting any allowable expenses (such as stamp duty, legal fees, and improvement costs) and the annual exemption.
How Do You Calculate Capital Gains on a Property?
Let’s take an example:
You inherited a flat in Guildford, Surrey, in 2015. It was worth £300,000 at the time.
You sell it in 2025 for £500,000.
Your gain is £200,000.
If you haven’t made any other gains and you're a higher-rate taxpayer, you might pay 28% CGT on £197,000 (after using your £3,000 exemption), which is £55,160.
But what if the 2015 valuation was incorrect or under scrutiny? That’s where an accurate valuation of property for Capital Gains Tax becomes vital.
Who Can Provide a Valuation for CGT Purposes?
HMRC recommends that any valuation of property for Capital Gains Tax be carried out by a qualified professional — ideally a RICS-registered valuer. A professional valuation is more likely to be accepted by HMRC and can be defended if queried.
In Surrey, where property prices vary dramatically between towns like Reigate, Woking, and Esher, local knowledge is crucial. A local surveyor familiar with the nuances of the Surrey market can provide more accurate assessments than a national firm with no local presence.
At DAW Surveyors, we provide independent, RICS-compliant valuations across Surrey for CGT purposes. Whether you’re in Leatherhead, Camberley or Godalming, we offer tailored reports that stand up to scrutiny from HMRC.
Types of Valuations for Capital Gains Tax
There are several types of valuation methods that may apply depending on the context:
1. Market Value at Date of Inheritance
If you inherited a property, the “acquisition cost” for CGT is based on its market value at the date of death of the previous owner. This often requires a Red Book Valuation, which is a formal valuation standard approved by RICS.
2. Market Value at Date of Gift
For gifted property (i.e., no sale price), you’ll need a current market valuation. HMRC treats the gift as if it were sold at open market value.
3. April 1982 Valuation (Retrospective)
For properties held since before 1982, the gain is calculated from the property's market value as of 31 March 1982. This type of valuation is often more complex and may involve archival research.
4. Rebased Valuations Post-Property Changes
If you’ve made structural alterations or extensions (which can be deducted from the gain), a retrospective valuation may help determine the “before and after” values.
Common Challenges in Surrey Property Valuations
Surrey’s property market is dynamic and varied — from luxury homes in Oxshott to flats in Redhill. Several issues can complicate the valuation of property for Capital Gains Tax:
Historic renovations that blur the line between improvement and maintenance
Lack of comparable sales data in rural or exclusive areas
Rapid market fluctuations — valuations done years ago may not reflect market volatility
Leasehold complications — particularly in shared-ownership schemes
All of these factors highlight the need for a professional valuation that’s defensible and based on solid, recent comparables.
What Happens If HMRC Disagrees with Your Valuation?
HMRC has the right to challenge any valuation submitted for CGT purposes. If your valuation is deemed too low, they may refer it to the District Valuer Services (DVS), a part of the Valuation Office Agency (VOA), to determine the fair market value.
To avoid this, your report should:
Follow RICS “Red Book” standards
Include comparable sales evidence
Be produced by a qualified chartered surveyor
Be clearly reasoned and well-documented
That’s why cutting corners with an online or unqualified valuation could cost you much more down the line.
When Should You Get a Capital Gains Tax Valuation?
Timing matters. You should consider getting a valuation of property for Capital Gains Tax:
As soon as you inherit or receive the property
Prior to selling or gifting a second home or investment property
If you’re undertaking estate planning or gifting property to children
Before preparing your Self Assessment tax return
In some cases, you can also submit your valuation for pre-agreement with HMRC through a “post-transaction valuation check” (PTVC), which offers more certainty and reduces the risk of penalties later.
How DAW Surveyors Can Help in Surrey
At DAW Surveyors, we specialise in RICS-compliant valuations for CGT, probate, and inheritance tax. Based in Surrey, we have extensive experience in assessing both residential and mixed-use properties across towns such as Dorking, Farnham, and Walton-on-Thames.
Our valuation reports are:
Compliant with RICS Red Book Global Standards
Supported by local market evidence
Defensible if challenged by HMRC
Delivered promptly with full transparency
Whether you need a retrospective valuation or a current market assessment, we can assist you in navigating your CGT obligations confidently.
Conclusion
Paying Capital Gains Tax is never enjoyable — but paying too much, or getting penalised for incorrect reporting, is worse. A professional valuation of property for Capital Gains Tax ensures that you’re paying only what’s legally required and can justify your position to HMRC.
In a high-value, fast-moving property market like Surrey, where local variations in price are common, using a local expert can make all the difference. If you’re planning to sell or gift a property — or have recently inherited one — don’t delay in getting a proper valuation.
Get in touch with DAW Surveyors today to arrange your Capital Gains Tax valuation in Surrey. Let’s help you protect your assets and meet your obligations — with confidence and clarity.