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HMRC internal manual

Capital Gains Manual

Valuation: quoted shares: further points

Further points

The usual rule in TCGA92/S272 (3) does not apply if the prices quoted in the Daily Official List are affected by special circumstances. Any claim that there are special circumstances should be referred to SAV.

Market closed
Shares held at 6/4/65
Non arm’s length disposal: large block of shares
Overseas companies

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Market closed

If the London Stock Exchange is closed then the valuation method depends on the date of valuation.

For valuation dates before 6 April 2015 the value to be used is the lower of the values under old TCGA92/S272(3) for the days immediately before and immediately following the closure (old TCGA92/S272(4)).

For valuation dates on of after 6 April 2015 the value is that on the day immediately before the closure (Regulation 2(b) of SI 2015/616).

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Shares held at 6/4/65

A more generous basis of valuation applies to the market value of quoted shares or securities at 6 April 1965. TCGA92/SCH11/PARA6 provides that the valuation under TCGA92/S272 (3) is amended to the mid-point between

  • the highest and lowest quotations on 6 April 1965, or
  • the highest and lowest prices at which bargains were done on that day

WHICHEVER IS THE HIGHER.

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Non arm’s length disposal: large block of shares

TCGA92/S272 (2) prevents the flooding effect reducing the market value of an asset if a large block of assets are placed in the market at the same time. If you are dealing with a non arm’s length disposal of a large block of shares you may want to check whether TCGA92/S272 (2) applies by sending a CG29 to SAV. It is unlikely you would want to do this in a case in which the taxpayer’s valuation of the shares disposed of is less than £500,000.

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Overseas listed companies

For valuations before 6 April 2015 the old version of TCGA92/S272 (3) did not apply to the market value of shares and securities quoted on a recognised overseas stock exchange. You should normally accept the customer’s figures if you are certain the shares are quoted. If having established the shares are quoted you still want to check the value you should sent a form CG29 to SAV.

For valuations from 6 April 2015 Regulation 3 of SI 2015/616 introduced a statutory rule for shares and securities that are listed on an overseas recognised stock exchange (but not on a UK list). The value is the closing price for the day (or if more than one closing value is quoted, the lower value plus half of the difference between the two figures).  Where the shares or securities are listed on more than one overseas list then the value should be based on the list of what would be regarded as a major exchange.  If that distinction cannot be made then the values in the list of the territory in which the company is resident should be used.

A list of “recognised stock exchanges” can be found by searching for that phrase on gov.uk.