Unquoted shares

The taxpayer appealed against capital gains tax assessments issued on the basis that the value of shares held at 31 March 1982 had been £1.23 each. E argued that their value had been £4 each.

The First-tier Tribunal reviewed the evidence and decided that a price to earnings ratio of 14 should apply valuing the shares at £4.04 each.

However as the taxpayer owned less than 2% of the shares in the company this value was to be discounted by 40% resulting in a capital gains tax valuation of £2.42 each.

The tribunal held that it was not ‘worthwhile or appropriate to trawl the cases comparing discounts in share valuation cases. Each case must depend on its own particular facts and circumstances; these circumstances would then have to be compared with the company in question and appropriate adjustments made none of which could be carried...