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HMRC internal manual

Capital Gains Manual

Close companies: transfers at undervalue: general

A transfer at undervalue by a company will also reduce the value of the company’s shares. Put simply if a company with assets worth £100,000 sells them for £20,000 the value of a hundred per cent shareholding will be reduced by £80,000. The value of a seventy five percent shareholding may be reduced by £60,000.