Fiscal share valuations

Produced by Tolley

The following Corporation Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Fiscal share valuations
  • Definitions
  • Market value
  • Comparison with other transactions
  • ‘Related Property’ rules
  • Fiscal valuation methods
  • Minority and majority shareholdings
  • Dividend-based valuations
  • Quasi-partnerships
  • HMRC ― agreeing valuations

Fiscal share valuations

Valuations may be required for tax purposes in many different scenarios, including:

  1. on grant of share options to employees in a tax-approved share scheme

  2. the taxpayer elects to 'rebase' assets to their value as at 31 March 1982

  3. assets are transferred between connected parties

  4. shares are acquired at undervalue by reason of someone’s employment

For guidance on commercial valuation methods, see the Measures and methods of valuation guidance note.


There are two relevant definitions in the Taxes acts for the purpose of private company share valuations:

Market value is defined in TCGA 1992, s 272 and in IHTA 1984, s 160. It is essentially the amount which could be obtained on the open market between an arm’s length vendor and purchaser. This is covered in further detail below.

The definitions of market value in IHTA and TCGA are very similar and case law which is relevant for one is generally relevant for both. Principles established in relation to the definition of valuations for estate duty and capital transfer tax are also relevant for capital gains tax and inheritance tax as the definition was the same as it is for inheritance tax.

Money’s worth is defined in ITEPA 2003, s 62(3). Money’s worth is essentially the amount a recipient of an asset could fetch for an asset, taking into account any restrictions which may be in place.

Money’s worth and Market value could on occasion be substantially different.

Market value

For fiscal valuations, Market value is the amount which could reasonabl

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