Shares and Assets Valuation (SAV) is a specialist area within HM Revenue & Customs (HMRC) based in Nottingham. In addition to valuing unquoted shares we also value intangible assets (intellectual property, trademarks, patents, goodwill etc), foreign shares, foreign residential property, bloodstock, chattels (things like antiques, art and jewellery), boats, aircraft and a whole range of other assets. When the open market value of any of these assets is relevant to your tax affairs, your Tax Office may instruct SAV to consider and, if necessary, negotiate that value with you. Depending on the circumstances, you may be able to ask SAV to consider the value once the transaction has occurred and before you file your return, using the Post Transaction Valuation Check (PTVC) service.
This page provides some guidance on the points you should consider when preparing/submitting a valuation of some of the main assets SAV considers. If you have any general valuation queries, advisers at the enquiry line detailed below will try to assist where possible. They are only able to provide general guidance and cannot comment on specific valuations or tell you how to carry out a valuation.
SAV’s full address is:
HMRC Shares and Assets Valuation
PO Box 38
Castle Meadow Road
DX 701201 Nottingham 4
Fax: 03000 562705
Enquiry line: 0845 601 5693 open from 8.00 am to 4.00 pm Monday to Friday)
NB. The enquiry line cannot give advice on any tax matters.
For enquiries relating to Capital Gains Tax and Income Tax (ITEPA), please contact your Inspector of Taxes.
For Stamp Duty and Inheritance Tax, try the following helpline telephone numbers:
SAV undertakes the valuation of a wide range of asset for all tax purposes. As there is no active market for most of the assets considered by SAV, decisions from the Courts over the years have provided guidance.
When carrying out valuations for tax purposes it is important that they are carried out on the correct basis. Under Self Assessment procedures taxpayers are responsible for either calculating the appropriate amount of tax due or, in the case of individuals, for providing the appropriate figures to enable HMRC to calculate it on their behalf. If a valuation is not provided on the correct basis a taxpayer's tax return may be challenged by HMRC. If following any challenge the valuation has to be adjusted the taxpayer may be faced with having to pay not only interest on any additional tax payable but penalties as well.
The correct basis of valuation for tax purposes is the 'market value' as defined in the relevant statute. The definition of market value for Capital Gains Tax can be found in Section 272 of the Taxation of Chargeable Gains Act 1992, for Inheritance Tax it can be found in Section 160 of the Inheritance Tax Act 1984 and for Stamp Duty Land Tax in Section 118 of the Finance Act 2003.
These definitions are all very similar and broadly define market value as:
'The price which the property might reasonably be expected to fetch if sold in the open market at that time, but that price shall not be assumed to be reduced on the grounds that the whole property is to be placed on the market at one and the same time.'
The current statutory definitions are similar to those used in earlier Acts and over the years the above definition has been examined by the courts in numerous cases. The case law was usefully summarised by the Court of Appeal in the case of IRC v Gray (Executor of Lady Fox (Deceased) in 1994. The case law has established some important assumptions that must be made when arriving at the market value in accordance with the above definition.
Case law has established the following assumptions:
In Capital Gains Tax cases the valuation date may be the 31 March 1982 (when required by Section 35(2) of the Taxation of Chargeable Gains Act 1992), or, when it is necessary to assess the market value at the date of actual acquisition or disposal, the date a binding contract was entered into.
SAV does not undertake the valuations of UK land and buildings for tax purposes. The Valuation Office Agency (Opens new window) deals with these valuations.
The links below provide guidance on the points you should address and the evidence you should provide when preparing/submitting a valuation for some of the different assets SAV considers. Providing this information should increase the chance of your value being accepted or, if this is not possible, reduce the length of time it takes to agree a value with you.
SAV is happy to deal with you directly on all valuation matters. However, valuation is a specialised subject and can involve highly complex issues, so you may wish to consider appointing a professional adviser, such as, an accountant, solicitor or valuation expert to represent you. If you do, it will gladly liaise with them too.
For any valuation of unquoted shares, whether registered in the UK or a foreign country, you should consider/provide the following information:
The valuation must reflect the extent to which a potential buyer of the asset can control, influence and derive enjoyment from the asset. Usually, if the degree of control of the asset is less than 100 per cent, then the value of the percentage share of the asset will be less than a pro-rata proportion of the asset's total value.
In terms of unquoted shares, there are many degrees of control, usually determined by the voting power of a particular block of shares. These range from full control, including power to liquidate the company, to a small or non-existent influence over the company's affairs of a minority shareholding.
The standard of information used in a valuation is also linked to the size and influence of the shareholding in question. The greater the influence a shareholding has then more detailed and sensitive information about the company can be used in addition to the company's accounts.
You may be able to offset any loss arising against income tax or Capital Gains Tax as long as you meet all of the relevant conditions. To make a claim, in the first instance you must contact your Tax Office who may ask SAV to investigate the situation. You can make a claim for 'negligible value' by making an entry on your tax return or by letter. Contact your local HMRC office for further information or see Help Sheet HS286.
If the company is in liquidation or receivership you should provide the following:
If the company is not in liquidation or receivership, then comprehensive information is needed to show that the shares or securities have become of negligible value. The burden of proof for the claim lies with you.
No. The test is an objective one. A rule of thumb percentage of either the nominal value of the securities or of the price for which you originally acquired them may not work. The securities could pass such a percentage test but still have significant value. SAV consider each case on its own merits.
To qualify, the asset must have become of negligible value, it may therefore be necessary to consider the value of the shares/assets when they were acquired to ensure that they were not of negligible value when they were acquired. You should provide evidence to show that the assets had value when they were acquired.
SAV publish a list of shares and securities in companies that were formerly quoted on the London Stock Exchange that have been previously accepted as being of negligible value. However, even if a company appears on the Negligible Value List then you still have to submit your claim to your Tax Office as above. The list is available at the following link: Negligible Value List
There is no similar list published for either unquoted companies, companies formerly quoted upon the Alternative Investment Market and PLUS Market or any non-UK companies.
Goodwill is an asset within the meaning of TCGA92/S21(1). The term 'goodwill' is however not defined for the purposes of the Capital Gains legislation in TCGA 92. The leading authority on its meaning is found in IRC v Muller & Co Margarine (1901) AC217 where in answer to the question 'What is goodwill?' Lord Macnaghten said 'It is a thing very easy to describe, very difficult to define. It is the benefit and advantage of the good name, reputation and connection of a business. It is the attractive force which brings in custom. It is the one thing which distinguishes an old established business from a new business at its first start'.
The decision of the Special Commissioners in Balloon Promotions Ltd v Wilson SpC524(2006)STC(SCD0167 provides authority for the fact that for Capital Gains purposes goodwill should be construed in accordance with legal rather than accountancy principles. A distinction must therefore be drawn between 'goodwill' for Capital Gains Tax purposes and 'goodwill' within Sch29 FA 2002 where accountancy principles apply and 'goodwill' is simply the difference between the overall worth of a business when it changes hands and the value of its identifiable (including intangible) assets.
When valuing the goodwill of a business you should consider and provide details of:
SAV may be asked to consider the value of quoted shares where:
You should provide your best estimate of the value of the stock together with supporting evidence and if applicable the exchange rate used.
Intangible assets are non-financial fixed assets that do not have a physical substance but are identifiable and controlled through custody or legal rights. They include:
Identification of intangible assets can be very difficult and involve a range of complicated issues, especially in respect of intellectual property. You may want to seek specialist guidance if the circumstances of your case are complex.
Intangible assets are often valued either on a multiple of profit/income stream or using a discounted cash flow. When submitting a valuation of an intangible asset you should consider and provide details of:
SAV may be asked to consider the valuation of chattels including:
If the valuation is for Inheritance Tax purposes, you will need to complete Form D10 which is a supplementary schedule attached to the IHT200. This will guide you through the information you need to provide.
For all valuations you need to consider/provide, as appropriate:
SAV may be asked to consider the valuation of bloodstock, primarily race horses, and livestock herds for tax purposes. When preparing/submitting a valuation of bloodstock and livestock you should consider/provide details of:
The value of a Name's Lloyd's underwriting interest normally qualifies for Business Property Relief at 100 per cent under IHTA 84/S105(1)(a) to the extent that the Funds at Lloyds (FAL) are commensurate with the amount of underwriting business that is being written by the Name. As a rule of thumb, Business Property Relief is not restricted as long as the value of the Funds at Lloyds assets are not substantially greater than the minimum Funds at Lloyds requirement. When preparing/submitting a valuation in respect of a Name's underwriting interest, you need to consider/provide details of:
SAV may be asked to consider the value of foreign property and land, including timeshares. When preparing/submitting a valuation of foreign land/property, you will need to consider/provide as appropriate:
Individuals and trustees can have the value of unquoted shares and goodwill checked by SAV if they wish. But, SAV can only do this:
This is called a post transaction valuation check. If you wish to do this, you should complete form CG34 (which you can get from any HMRC Office or Enquiry Centre) and, for individuals, partnerships and personal representatives send it direct to the address shown on the form.
Where appropriate, SAV will check the details on your CG34 and let you know if it:
SAV's valuer will try to complete the valuation process quickly. But, sometimes it will not be possible to agree values before you have to send in your tax return, which must be done by the due date, whether or not SAV have completed the valuation check.
You should enter the amount of the gain (or loss) that you expect SAV to agree from the valuation on your tax return.
Your Tax Office may have to give you formal notice that it is carrying out an enquiry, if:
Once the filing date has passed SAV will only continue with an ongoing PTVC request if the Tax Office requests us to do so.
There is no formal PTVC service for Employment Income PTVCs. Requests for such valuations should now be directed to:
Personal & Capital Gains Tax Compliance
2nd Floor (West Wing)
Fitz Roy House
Castle Meadow Road
Quoting reference: LC/P+CGTC/S0842/PTVC
The following information should be included with the request:
All the above information must be included before the question of valuation can be considered.
Once all the required information has been provided, the Local Compliance Nottingham Team will ensure that the valuation request is appropriate and then refer the request on to SAV for consideration.
Whilst this ITEPA PTVC service is available for the time being, all
areas of HMRC work are subject to close scrutiny and there is no guarantee
that it will be maintained.
What happens if I cannot reach an agreement with Shares and Assets Valuation?
SAV settle the vast majority of valuations referred by negotiation but if it is not possible to reach a negotiated agreement it will be necessary to arrange an appeal hearing before the Tax Tribunals to resolve the matter.
The Tax Tribunals system was introduced on 1 April 2009 and further details are available on the Finance and Tax Tribunals website
You can get more detailed information about the work of Shares and Assets Valuation in the SAV Manual that is available at the following link:
SAV annually meet with external practitioners at the Share and Assets Valuation Fiscal Forum in order to exchange views and opinions on technical and practical matters. The Forum provides an opportunity to clarify current practice and to update practitioners on procedural matters. There is a separate forum for matters relating to chattels.
The minutes of these forums can be found at the following links:
Further information about the underlying taxes can be found at: