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DAVID BOWES considers the Court of Session’s finding in Gray’s Timber Products Limited v HMRC that personal rights are ignored when valuing company shares
KEY POINTS
- The Commissioner said Mr G disposed of his shares for more than market value.
- The purchaser’s right to step into the shoes of the vendor.
- The link between the subscription agreement and the taxpayer’s employment.
- Missed opportunities?
Readers may be aware of the valuation issues raised in the Special Commissioner’s decision in Company A [2007] STC (SCD) 466.
Various arguments for and against that decision have been rehearsed in the pages of Taxation (see for example What is market value? by Robert Maas and my article Market value revisited) and elsewhere.
In particular challenges have been made to the long established law that while regard could be had to rights and restrictions embedded in a company’s articles of association when determining the value of an unlisted company’s shares any...
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