OT30307 - Capital Gains

Valuation of Oil Assets (including shares). Principles of Valuation. Prudent Lotting.

The valuation of an asset or collection of assets which can be broken up and sold in lots should value the whole on the assumption that it will be ‘lotted’ in such a way as to maximise the proceeds of sale.

In some cases the value of the whole may be greater than the total values of each item sold separately. If so, it should be valued as a whole.

Conversely, in some cases the value of the whole would be increased by the asset being broken up into appropriate lots, in which case this is the basis to adopt. For example, in the Estate Duty case of Duke of Buccleuch and another v CIR [1966] I All ER 129, the House of Lords held that a large Estate was to be subdivided into its natural units for valuation purposes.