What's it worth?

KEY POINTS

• The basis on which shares should be valued.
• The net assets need to be ascertained.
• Applying a discount.
• The smaller the shareholding the larger the discount.

The recent Special Commissioner's decision in Executors of Ian Campbell McArthur (deceased) (SpC 700) is interesting on a number of levels.

The deceased held minority interests shares in three companies which had once been trading but were now investment companies: Cape Wrath Hotel Company Limited Chapman of Inverness Limited and New Inverness Laundry Company Limited.

Matters were complicated by cross-shareholdings: Cape Wrath held 1 032 shares in New Inverness and Chapman held 400 ordinary shares in New Inverness. In addition there were 'convertible' loans held by the deceased in Chapman and New Inverness which after conversion would have resulted in the deceased holding majority interests.

This...