The intention of the legislation is to produce a fair basis of
valuation between the taxpayer and HMRC: but to give effect to that
intention, departures from the reality of the situation may be
necessary because of the absence of a truly open market for
unlisted shares.
The statutory provisions will not work if read too
literally. They must be made to work - a feat of imagination is
necessary.
A-G (Ireland) v Jameson [1905] 2 IR 218:
"How can such shares in such a Company with such articles have their value estimated at the price which, in the opinion of the Commissioners, such property would fetch if sold in the open market? An actual sale in the open market is out of the question. A feat of imagination has to be performed. "
Lord Ashbourne at page 226
In re Holt [1953] 1 WLR 1488:
"The result is that I must enter into the dim world peopled by indeterminate spirits of fictitious or unborn sales. It is necessary to assume the prophetic vision of a prospective purchaser at the moment of the death of the deceased and firmly reject the wisdom which might be provided by the knowledge of subsequent events. "
Danckwerts J at page 1492
In re Lynall deceased [1971] 3 AER 914:
"I support the view... that s.7(5) (of the Finance Act 1894) is merely the machinery for estimating value, that it will not work if s.7(5) is read literally, that it must be made to work....."
Lord Reid at page 917
| Additional Guidance: SVM150000 |
