Because of the diversity of circumstances of valuation, it is
not possible to lay down detailed rules as to the calculation of
that part of the value transferred to be left out of account in
determining the value of relevant business property. The answer
lies in a fair and even-handed approach to the calculation of the
difference between the value of the shares arrived at with the
excepted asset included in the company and the value with the
excepted asset excluded.
If any difficulties arise in the calculation the case should
be referred to the Appeals Team.
For this purpose, where an 'excepted asset' was subject to a
mortgage, charge or other debt at the valuation date, the net value
of the asset should be looked at. An 'excepted asset' should not be
reduced by a proportion of the uncharged debts. This is because we
have to compare the value of the shares if the excepted asset were
removed from the company with the value of the shares if it were
not.
This does not prevent you taking into account the need for
sufficient liquidity to cover the payment of liabilities in
determining what constitutes an excepted asset in the first place -
particularly as regards the amount to be treated as surplus cash.
Once you have determined the amount of cash and/or other assets to
be treated as 'excepted assets', you should not reduce them
further.
Decisions in this area need to be commercially sensible and
realistic and bear a measure of consistency with the means adopted
for the valuation of shares.
| Additional Guidance: SVM150000 |
