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HMRC consults on draft share market value regulations

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HMRC is consulting until 22 August on the Market Value of Shares, Securities and Strips Regulations, SI 2014/Draft.

TCGA 1992 s 272 and ITTOIA 2005 s 450 specify how the market value of shares, securities, strips, etc. is to be determined for various purposes. Those sections were amended by FA 2007 Sch 26 paras 4 and 5 where the date of valuation falls on or after a date to be appointed. Those amendments granted HM Treasury the power to make regulations specifying how market value should be determined. These draft regulations are the first use of those powers.

This instrument implements a recommendation of the OTS that the closing price of the shares on the relevant day should be used, instead of the current ‘quarter up’ calculation method. It provides that the market value should be the mid-point between the closing ‘buy’ and ‘sell’ prices quoted (also known as the ‘mid-price’). The instrument also contains equivalent provisions in relation to the valuation of strips, as well as provisions, which ensure that same-day disposals of employment-related securities at arm’s length are valued in a way that ensures a nil gain for CGT purposes.

Issue: 1223
Categories: News , Corporate taxes