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HMRC internal manual

Shares and Assets Valuation Manual

Files and Forms: The SAV Notes Sub File - VAL26

The following pages contain guidelines to the completion and use of various sub-files. Assorted prints of these are currently in use and though the guidelines are generally appropriate, some modification may be necessary in particular cases.

The SAV Notes Sub-File - VAL 26

Make sure that the front of the sub-file is completed as soon as the relevant information is available and then keep it updated.

Nature of the business

This may need elaboration as, and when, further information becomes available. Watch out for any change from trading activities to property letting or investment.


This may well affect the value of the company depending on the nature of the business and the locality - for instance, does the company operate in a prosperous area or in a depressed area.

Corporation Tax District and Reference

The Corporation Tax District is the tax district which holds the company’s tax papers. Note this if it is known. It will speed up the process of obtaining papers on a subsequent occasion if these details can be shown on the requisition.

Transfer restrictions

Make a note of all transfer restrictions.

Comparable Companies

If comparable companies have been identified, note them for future use. It will also be useful to note why any apparently comparable companies have been rejected.

Issued Capital

This should always be noted and any changes recorded together with the date of any changes.

Not only should any changes be recorded but the effect of the changes on the rights of the shareholders should be considered in the light of the implications for tax purposes for example the shifting of value from one class of shares to another by varying the voting or dividend rights.

Recent allotments

  • Was it a bonus issue? If so, were the shares allotted pro rata to existing shareholders? If not, there may be tax implications.
  • Were the shares allotted for cash? If these were not allotted to all shareholders pro rata were they issued at a reasonable price? Has a benefit accrued to anyone?
  • As a result of the change, does a benefit accrue to any particular shareholder(s) which may attract a charge to tax? Has there been a change of control?
  • Bear in mind Sections94-102 Inheritance Tax Act 1984.

Purchase of Own Shares

This will usually be mentioned in the Directors’ Report or in the Notes to the Accounts. To be safe always check the issued capital shown in the latest available accounts with that shown on Val 26.

A purchase of own shares by the company will increase the influence of the remaining shareholders, sometimes quite significantly so it is important to note the change in the issued capital. (In addition, note the number of shares purchased and the price paid under “transactions” on page 2 of the Val 26.)

Classes of shares issued

If there is more than one class of shares, ascertain and note the rights attached to each class.

It is not possible to value the shares of any class without knowing the rights attached to every class.

Shares carry whatever rights have been assigned to them by the Articles or subsequent special resolution. In one exceptional case, a single £1 preference share was entitled to a fixed cumulative dividend of £50,000 and 76% of all votes.

Remember that under the terms of Table A all shares carry equal voting rights unless there is a specific provision in the Articles to the contrary.

Agents sometimes misunderstand the provisions in the Articles. It is desirable to obtain copies of the Articles and any special resolutions to ascertain the rights rather than merely ask the agents.

Page 2 of Val 26 provides an Index of sub-files which is completed by the support staff.


Details of actual sales of shares are received from various sources.

  • From replies to initial enquiries
  • Purchase of own shares
  • In correspondence.

These should all be recorded on the Val 26, so long as the information is in the public domain. Otherwise, record the information on the VAL27.


The VAL26 should not contain any protected taxpayer - specific information, for example details of valuations closed under risk assessment. There is a separate folder for holding details of valuations closed on RA.

  Additional Guidance: SVM150000