Commentary

C2.122 Quoted shares and securities

Capital gains tax
Capital gains tax | Commentary

C2.122 Quoted shares and securities

Capital gains tax | Commentary

C2.122 Quoted shares and securities

Shares and securities listed in the Stock Exchange Daily Official List

In the case of shares and securities listed in the Stock Exchange Daily Official List (SEDOL), special rules are laid down. The general rule is subject to the qualification that where in consequence of special circumstances, prices quoted in that list are by themselves not a proper measure of market value, the method prescribed is not to be applied1.

If information is withheld when it ought to be made public this may amount to a 'special circumstance' within these provisions. In such a case a finding of fact that information has been so withheld is necessary. Special circumstances, however, mean circumstances that are exceptional, abnormal or unusual. The fact that the Stock Exchange does not have the full information which is available to the directors of the company does not amount to 'special circumstances'. The mere fact that the directors have knowledge which would affect the prices quoted cannot be regarded as unusual. It is a feature or circumstance of everyday commercial activity in the buying and selling of shares that full and complete information on every matter that may affect prices cannot be known. In Crabtree2, takeover negotiations were in progress on 6 April 1965 and these were relied upon by the taxpayer as special circumstances. There was no finding of fact that information had been withheld when it ought to have been made public and the fact that the takeover negotiations were not

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