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HMRC internal manual

Capital Gains Manual

Assets: principles of valuation: meaning of market value


CG16210 explains that the market value of an asset at a particular date may be required to compute a chargeable gain in several circumstances. In each case the definition of market value is given by TCGA92/S272 (1) as

‘The price which those assets might reasonably be expected to fetch on a sale in the open market.’

The guidance below explains how this definition is applied in practice in particular circumstances.

  • The prudent lotting principle, see CG16340
  • Flooding the market, see CG16343
  • The hypothetical purchaser, see CG16350
  • The special purchaser, see CG16352
  • Factors to be taken into account, see CG16360
  • Incorrect approaches to valuation, see CG16370
  • Valuing assets collectively, see CG16375-16377

If required, further detailed guidance on the principles of ‘market value’ and the case law supporting the various principles of valuation can be found in the Valuation Office Agency’s Inheritance Tax and Capital Gains Tax Manuals.