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HMRC internal manual

International Manual

International movements of capital: Valuing transactions

Regulation 4 of S.I. 2009 / No. 2192

Regulation 4 deals with determining the value of an event or transaction. Regulation 4(1) introduces the specific valuation regulations.

Regulation 4(2) provides that the value of an issue or transfer of shares or debentures is its market value.

Regulation 4(3) provides that the value of an event or transaction which results in a foreign subsidiary becoming, or ceasing to be, a controlling partner in a partnership is the market value of the share of the subsidiary in the assets of the partnership immediately after it becomes a controlling partner or, as the case may be, immediately before it ceases to be a controlling partner.

Regulation 4(4) provides for the aggregation of the value of all the events and transactions in a series.

‘Market value’ is not defined in the legislation and should be taken to have its ordinary meaning, implying willing buyers and sellers acting at arm’s length. HMRC does not expect businesses to undertake valuations as a matter of course. The key question for any particular transaction will usually be whether it is worth more or less than £100 Million. For the purposes of the reporting requirement a transaction worth £90 million is no more reportable than one worth £5 Million; likewise a transaction clearly worth more than £100 Million is reportable regardless of its precise value.