Graham Chisnall & Ors v The Commissioners for HMRC
[2023] UKFTT 857 (TC)
Craig Kay v The Commissioners for HMRC
12 October 2023
[2023] UKFTT 861 (TC)
First-tier Tribunal
Someone gave shares to charity and claimed a tax break. The tax office said the shares weren't worth as much as he claimed. An expert agreed with the tax office, so the person has to pay more tax.
Key Facts
- •Mr. Kay gifted shares in Access Intelligence plc to charity and claimed tax relief under section 587B ICTA 1988.
- •HMRC reduced the claimed relief from £80,750 to £17,936 based on a lower share valuation.
- •The dispute centered on the market value of the shares at the time of the gift.
- •Mr. Kay valued the shares at 42.5p per share, while HMRC valued them at 9.44p per share.
- •The shares were traded on AIM, but trading volume was limited.
- •Mr. Kay did not present expert evidence, while HMRC presented expert evidence from Clare Rooney.
Legal Principles
Valuation of shares for section 272 TCGA 1992 purposes involves a hypothetical sale by a willing vendor to a prudent purchaser, considering all relevant facts.
Netley v. HMRC [2017] UKFTT 442 (TC)
Market value is determined as per the 1992 Act (Taxation of Chargeable Gains Act 1992).
Section 587B(10) ICTA 1988
If the Tribunal finds an overcharge or undercharge, it must adjust the assessment accordingly.
Section 50 TMA 1970
Outcomes
Appeal dismissed.
The Tribunal accepted HMRC's expert evidence, which valued the shares at 9.42p per share based on an arm's length acquisition and other valuation methods. The limited AIM trading data was deemed unreliable.
Tax assessment increased.
Mr. Kay was undercharged; the correct tax due was calculated based on the 9.42p per share valuation.