SVM107180 - Capital Gains Procedures: Joint Holdings

For valuations at 31 March 1982 it is sometimes claimed that if shares are held in the names of A and B jointly, the shares of each should be valued as part of the total holding. This will normally produce a higher value especially where the total holding confers control.

If the shares were actually registered in the names of two or more shareholders at 31 March 1982 (or if documentary evidence can be produced to show that shares registered in the name of one were in fact held as joint tenant or tenants in common) then each individual’s share is valued as part of the total holding.

Example

60 shares (out of 100) were registered in the names of A & B at 31 March 1982. If the company was worth £100,000 the valuation of the interest of each individual will be:

Value of company	£100,000
60% thereof (less say, 15%)	£ 51,000
Each one half share	£ 25,500
Less discount for joint ownership (10%)	£ 22,950

No distinction should be made between the holdings of A and B because only the first named was entitled to vote.

If the customer objects to the discount of 10% they may be informed that this method of valuation of a joint holding has been approved by the Special Commissioners.

If a lower value results, each individual’s holding may be valued as if each owned the proportion of shares in their sole name.

This instruction cannot, of course, apply to shares held in the names of two or more trustees.

Additional Guidance: SVM150000