This Practice Note details the circumstances in which it will be appropriate to value assets in financial remedy proceedings. It provides guidance on completion of a financial statement in Form E and the valuation of different types of assets including property, business assets, pensions and insurance policies, and chattels. It also sets out procedural points, including as to expert evidence. Rationale for valuation In any financial remedy application, some information as to the value of all relevant assets and liabilities needs to be obtained. A failure to do so may be tantamount to professional negligence. Only in this way are the parties and the court able to assess the total financial picture. The financial statement in Form E invites valuations to be provided, for example: • a copy of any valuation of real property obtained within the preceding six months • a recent mortgage statement confirming the sum outstanding on each mortgage • statements covering the last 12 months for each bank, building society and national savings account—the requirements include all accounts, whether in credit or

Where a private company limited by shares has allotted shares in the period between the date of the balance sheet required by CA 2006, s 92 as a condition to re-registration as a public company limited by shares, and the shares are allotted as fully or partly paid up as to their nominal value or any premium on them otherwise than in case, Companies House will not entertain an application for re-registration unless the company has obtained an independent valuation of the non-cash consideration dated not more than six months before the allotment (unless the allotment was in connection with a share exchange or a proposed merger with another company) (CA 2006, s 93).

When a recovery plan is required, a valuation summary is sent to the Pensions Regulator along with the recovery plan.

What is a Value Creation Plan? The term ‘Value Creation Plan’ (VCP) normally refers to an employee incentive plan which is designed to deliver unusually large pay-outs to participants provided that very challenging share price targets are achieved. VCP awards can either take the form of a cash bonus or a share-based arrangement (such as a conditional share award or nil cost option) which may be satisfied with either shares or cash. In all cases, the vesting of the VCP award will predominantly be dependent upon the satisfaction of ambitious share price growth targets over the relevant performance period (usually of at least five years, in line with investor expectations of a VCP having to create substantial and sustainable value over at least a five-year period), typically with other targets also having to be satisfied alongside these. Most commonly, the pay-out in respect of the vested award will be a percentage of the value created above the relevant share price hurdle, subject to a cap. VCPs have predominantly been operated on a one-off basis by fully listed companies

A tax on supplies of goods and services made by a taxable person in the course or furtherance of a business.

Taking steps to improve the cost-effectiveness and/or efficiency of the project and/or the completed works. For example, in the FIDIC contracts value engineering provisions allow the Contractor to submit proposals during the course of the Works to accelerate completion, reduce the costs of maintaining, executing or operating the Works, improve the value or efficiency of the completed Works, or otherwise benefit the Employer. Similar provisions exist in the NEC4 contracts.

When value is shifted out of one asset into another asset or assets; there does not need to have been any actual disposal of the original asset.

The value shifting rules are anti-avoidance provisions. They are similar to the rules applying to depreciatory transactions in that they target the artificial transfer of value out of assets as a result of transactions between connected parties. The value shifting rules, however, apply more widely. Unlike the depreciatory transaction rules, they: • do not always require an actual disposal. The rules instead impose a tax charge at the time of the value shifting transaction by deeming the asset to have been disposed • can convert losses into gains and increase gains realised on a disposal (whether actual or deemed), and • are applied at the level of the asset itself. There is, therefore, no need to prove a material reduction in the value of the asset holding company's shares for the rule to be applied The two sets of rules should, however, always be considered together. For a discussion of the anti-avoidance provisions applying to depreciatory transactions, see Practice Note: Depreciatory transactions and dividend stripping. Without these anti-avoidance provisions, it would be possible for value to be

ARCHIVED: This Practice Note has been archived and is not maintained. The value shifting rules are anti-avoidance provisions. They are similar to the rules applying to depreciatory transactions in that they target the artificial transfer of value out of assets as a result of transactions between connected parties. The value shifting rules, however, apply more widely. The rules were simplified and redrafted in relation to their application to transactions taking place between associated companies (ie members of the same group for tax purposes) by the Finance Act 2011 (FA 2011). The current regime, as it applies to corporate groups, applies in connection with the disposal of shares on or after 19 July 2011. The old rules (set out in this Practice Note) continue to apply to share disposals made before that date. In addition, the old rules could be triggered, in certain circumstances, by a company leaving its tax group within six years of the relevant disposal. Both regimes, therefore, are relevant in assessing the potential impact of the value shifting regime. Without these anti-avoidance

Introduction Valuation is required at many points in the lifecycle of an IP asset, and for many different purposes, including: • sale and purchase of a business (including mergers), either on the sale of shares or on the sale of the trade and assets of a business • sale and purchase of the IP (to establish an appropriate price and to deal with accounting matters) • joint ventures (as IP may form a key component of each party’s contribution to the joint venture) • litigation settlements/awards (to establish appropriate compensation) • insolvency (to establish the value of the assets of the insolvent business) • financial reporting requirements (for example, to confirm the current value of IP on the balance sheet) • for tax purposes, including: ◦ on transfer to a non-UK connected party—see Practice Note: Tax issues and incentives arising from assignment and licensing of IP ◦ on transfer between UK connected parties where the two parties are not both companies—see Practice Note: Tax issues and incentives arising from assignment and licensing of IP, and ◦ for

This Practice Note considers how various benefits are valued when calculating damages in an employment wrongful dismissal claim. Benefits covered include: private medical insurance, permanent health insurance, life assurance, company cars, and other travel benefits. Share incentive rights are also considered as well as the effect of exclusion clauses which purport to remove any claim for lost share incentive rights on termination of employment, or within a defined period afterwards. Damages may also be awarded for the value of pension benefits that would have accrued during the notice period. The effect of a wrongful dismissal on pension loss can be complex and is subject to specific presidential guidance. See Practice Note: Calculating pension loss in employment tribunal claims. The remedy for wrongful dismissal (ie a dismissal in breach of contract) is damages to put the employee in the position they would have been in if the employer had terminated the contract lawfully (ie not in breach of contract). It is necessary to consider the losses to the employee caused by the breach as opposed

NOTE: On 2 December 2024, the Lord Chancellor announced that the discount rate would change to positive 0.5%. The positive 0.5% discount rate is effective from 11 January 2025. Schedule A1 to the Damages Act 1996 provides that each subsequent review must be started within the five-year period following the last review. For these purposes, a review is concluded when the Lord Chancellor makes the determination as to the rate. General damages—PSLA General damages are those damages which cannot be precisely calculated and an assessment of an appropriate sum is made. They include: • non-pecuniary loss (past and future) for pain, suffering and loss of amenity (PSLA), handicap in the labour market, loss of congenial employment, loss of convenience, etc • future pecuniary loss, eg future loss of earnings, future care, etc In dental claims the general damages will also reflect the need to undergo remedial dentistry. For a more detailed definition, see Practice Note: Common recoverable losses in personal injury cases—What are general damages and special damages? The starting point for