Commentary

I8.312 Restrictions on transfer of unquoted shares and securities

IHT, trusts and estates

I8.312 Restrictions on transfer of unquoted shares and securities

I8.312 Restrictions on transfer of unquoted shares and securities

It is a common feature of private companies1 that their articles of association restrict the transfer of shares, and/or give existing members a right to purchase, pro rata and in preference to non-members, shares offered for sale by other members. The articles often go further and stipulate the price or the basis of calculation of the price at which the shares are to be sold, and the question arose as to whether, for estate duty, such a price represented the open market value2. The courts decided that it did not. The

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