SVM107080 - Capital Gains Procedures: Quoted shares

The Market Value of Shares, Securities and Strips Regulations 2015 (SI 2015/616) took effect from 6 April 2015 and changed the way shares listed in the Stock Exchange Daily Official List are valued for the purposes of the TCGA.

On any day that the Stock Exchange is open, the value will be

  • the lower of the two prices shown in the Stock Exchange Daily Official List for that day as the closing price for the shares, securities, or strips on that day

plus

  • one-half of the difference between those two figures.

If the Stock Exchange is closed, then it will be the value on the latest previous day on which it was open using the method above.

However, this valuation method won’t be used where special circumstances mean that the closing prices quoted in the Stock Exchange Daily Official List are by themselves not a proper measure of market value of the shares or securities.

Shares traded on markets such as AIM and NEX Exchange are not treated as quoted or listed for tax purposes.  However, for practical purposes, the closing mid-market price on the date of valuation may, in many cases, be viewed as the market value.

A list of all shares or securities formerly quoted on the London Stock Exchange which have been officially declared of negligible value for the purpose of S24 (2) TCGA is maintained on GOV.UK . This list is updated monthly.

HMRC Officers are instructed to refer the following matters to SAV:

  • CG cases where it is considered that there are ‘special circumstances’ in consequence of which the prices quoted are not a proper measure of the market value (Section 272(3) TCGA 1992 and Section 2(2)of the Market Value of Shares, Securities and Strips Regulations 2015).
  • Claims that by reason of its size a holding should have a special reduction in price. (Such reductions are precluded by the IHT and CG legislation.)
  • All cases where any individual holding of shares with a full listing is valued at over £1,000,000 and/or where a holding of shares on markets such as AIM and ICAP exceeds £100,000 in value.
  • Non arm's length disposal of a large block of shares with a value greater than £500,000
  • Shares and securities that are listed on an overseas recognised stock exchange
  • Suspended quotations.
  • Cancelled quotations, unless and until it is clear that the company is now an NQ and the former quotation is irrelevant for valuation purposes.
  • Claims that shares, following suspension or cancellation of a quotation, have become of negligible value for CG.

The instructions to HMRC Officers about valuing quoted shares are set out at in the CG Manual at CG 59510 +.

Additional Guidance; SVM150000