Expert evidence in tax tribunal appeals

Expert evidence is opinion evidence from someone with specialist knowledge, most often a valuer of shares, property or other assets, used where the tax turns on a figure the tribunal cannot work out for itself. In the First tier Tribunal you should ask for a direction under rule 15(1)(c) of the Tax Chamber Rules before relying on an expert, because the tribunal decides whether expert evidence is allowed and whether there should be a single joint expert. Disputes about the value of UK property for capital gains tax and inheritance tax go to a separate valuation tribunal, whose rules state expressly that the expert’s duty is to the tribunal.

When does a tax appeal need expert evidence?

Most tax appeals are decided on documents, witnesses of fact and the law. Expert evidence comes in where the answer depends on specialist judgment. Typical examples are the market value of unquoted shares for capital gains tax or inheritance tax, the value of a property at a death or disposal, and the value of goodwill or intellectual property on a transfer.

HMRC prepares for this too. ARTG8430 lists considering whether an expert witness is required among the tasks of the HMRC officer preparing a tribunal case. In share valuation cases, SVM117030 says HMRC’s Litigation and Technical Advice Team will give expert testimony at the hearing or assist an outside independent expert to do so, and SVM117020 says the decision to litigate may follow advice from an outside expert. For property, IHTM23002 explains that HMRC relies on the Valuation Office Agency. If you appeal a valuation you should expect to face a professional valuer. See disputing an HMRC valuation for the negotiation stage.

Which tribunal decides a valuation dispute?

Most valuation questions stay with the First tier Tribunal (Tax Chamber). Property is the exception. Under section 46D of the Taxes Management Act 1970, where the question in dispute on certain capital gains appeals is the value of property or of a lease, that question is decided by the “relevant tribunal”: the Upper Tribunal for England and Wales, and the specialist property valuation tribunals in Scotland and Northern Ireland. Section 222(4A) and (4B) of the Inheritance Tax Act 1984 make the same split for inheritance tax appeals.

So in a case where a property’s value and a point of law are both disputed, the value may be decided by one tribunal and the rest of the appeal by another. HMRC’s guidance at ARTG8500 notes that the tribunal can transfer proceedings and gives cases about the value of property as an example.

How do you get permission to rely on an expert?

Rule 15(1)(c) of the Tribunal Procedure (First tier Tribunal) (Tax Chamber) Rules 2009 (SI 2009/273) lets the tribunal give directions on whether the parties are permitted or required to provide expert evidence and, if so, whether they must jointly appoint a single expert. Rule 15(1)(d) lets it limit the number of witnesses, and rule 15(1)(e) and (f) control how and when evidence is given.

Apply under rule 6 in writing, with reasons, or orally at a case management hearing. In a Standard or Complex case the natural time is after the lists of documents are exchanged under rule 27. A good application identifies:

• the issue the expert will address, for example the value of a 30% holding at the valuation date;
• the discipline and, if possible, the proposed expert;
• whether each side should have its own expert or a single joint expert would do; and
• a timetable for exchanging reports, written questions and, where useful, a joint statement of the points on which the experts agree and disagree.

Evidence served without a direction is at risk. Rule 15(2)(b) allows the tribunal to exclude evidence provided late, in breach of a direction, or where admitting it would be unfair.

When is a single joint expert used?

A single joint expert is instructed by both sides and reports to the tribunal. It suits narrower or lower value questions, because it halves the cost and avoids a contest of opinions. The overriding objective in rule 2 asks the tribunal to deal with cases proportionately to their importance, complexity, cost and the parties’ resources, so it may favour a joint expert where the sum in dispute is modest. Where the valuation is the whole case and the amounts are large, each side usually wants its own expert.

What is the expert’s duty?

The Tax Chamber Rules do not set out the expert’s duty in words; the only express reference to expert evidence is rule 15(1)(c). The Upper Tribunal rules that govern property valuation cases (SI 2010/2600) do. Rule 17 says it is the duty of an expert to help the tribunal on questions within their expertise, and that this duty overrides any obligation to the person who instructed or pays them. The same rule says:

• no party may call more than one expert witness without permission, or two in mineral valuation and business disturbance cases;
• expert evidence is given in a written report unless the tribunal directs otherwise; and
• the report must state that the expert understands and has complied with the duty, contain the words “I believe that the facts stated in this report are true and that the opinions expressed are correct”, follow any practice direction and be signed.

Even in the First tier Tribunal, it is wise to instruct an expert on the same basis. A report that reads as advocacy for the client, ignores evidence that cuts the other way or strays outside the expert’s field is likely to carry little weight with a specialist tribunal.

What should the report cover?

A useful valuation report sets out the expert’s qualifications and experience, the instructions received, the valuation date and statutory basis of value, the information the expert relied on and any assumptions, the method chosen and why, comparable evidence, the conclusion with any range, and comments on the other side’s figure. It should be in the hearing bundle with the other evidence; see hearing bundles and skeleton arguments.

Who pays for the expert?

Usually you do, whatever the result. Rule 10 limits costs orders in the First tier Tribunal to wasted costs, unreasonable conduct, and Complex cases where the taxpayer has not opted out within 28 days of allocation. Outside those situations an expert’s fees are not recoverable from HMRC. Rule 16(2)(b) deals separately with the expenses of a person summoned as a witness who is not a party. See tribunal costs.

How might it work in practice?

Illustration only. Executors value a 25% shareholding in a family trading company at £400,000 for inheritance tax. HMRC’s share valuers say £650,000 and the estate appeals. The appeal is allocated to the Standard category. After lists of documents are exchanged, the executors apply for a direction allowing each side one valuation expert, with reports exchanged on a fixed date, written questions 21 days later and a joint statement before the hearing. The tribunal agrees. The joint statement narrows the dispute to the discount for a minority holding, and the hearing focuses on that single point.

What are the common mistakes?

• Serving a valuation report with the list of documents without seeking a direction on expert evidence.
• Using the valuer who acted in negotiations as an independent expert without considering whether their earlier role affects their independence.
• Instructing an expert on the wrong valuation date or basis of value.
• Arguing a property value in the First tier Tribunal when statute sends that question elsewhere.
• Assuming the expert’s fee will be recovered if the appeal succeeds.

The party with the burden of proof needs the stronger evidence on value; see burden of proof in tax appeals and evidence and witness statements.

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Related Accountapedia entries

• Costs in tax tribunal appeals
• Evidence and witness statements at the tax tribunal
• Lists of documents in tax tribunal appeals
• Making a late appeal to HMRC or the tribunal
• Applying for tribunal directions in a tax appeal

Sources

• legislation.gov.uk: SI 2009/273
• legislation.gov.uk: SI 2009/273
• legislation.gov.uk: SI 2009/273
• legislation.gov.uk: SI 2009/273
• legislation.gov.uk: SI 2009/273
• GOV.UK: Manual page ARTG8430
• GOV.UK: Manual page SVM117030
• GOV.UK: Manual page SVM117020
• GOV.UK: Manual page IHTM23002
• legislation.gov.uk: Act 1970 c. 9, section 46D

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 24 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.