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HMRC internal manual

Shares and Assets Valuation Manual

HM Revenue & Customs
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Capital Gains Tax procedures: quoted shares

Section 272(3) TCGA 1992 provides that the market value of shares or securities listed in The Stock Exchange Daily Official List shall be the

    1. the lower of the 2 prices shown in the quotations for the shares or securities in The Stock Exchange Daily Official List on the relevant date plus one-quarter of the difference between those 2 figures (the ‘quarter-up’ price), or
      1. halfway between the highest and lowest prices at which bargains, other than bargains done at special prices, were recorded in the shares or securities for the relevant date.

Shares traded on markets such as AIM and ICAP Securities and Derivatives Exchange are not treated as quoted or listed for tax purposes. The CG Manual at CG50250+ refers.

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 the HMRC’s Internet site at . This list is updated monthly.

Inspectors are instructed to refer the following matters to SAV:

  • CGT 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.
  • Claims that by reason of its size a holding should have a special reduction in price. (Such reductions are precluded by the IHT and CGT 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.
  • 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 CGT.

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

If a form CG29 contains a request for valuation of unquoted shares, you should accept the CG29 in lieu of a CG30, seeking any necessary further information from the Inspector.

  Additional Guidance: SVM150000