Nicholas Close v The Commissioners for HMRC
Decision date: 6 May 2022
Neutral citation: [2022] UKFTT 193 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
This case concerned the market value for Readybuy Plc shares gifted to charity on 8 September 2003 and 9 December 2003 for capital gains tax relief, and appeals against HMRC closure notices. The Tribunal accepted the expert valuation approach largely but gave greater weight to arm’s‑length SPA consideration and subscriber subscription prices, finding market value to be 12.1p per share on both dates. The appeals were dismissed and HMRC’s assessments adjusted to reflect the 12.1p valuation; an abuse‑of‑process challenge was refused.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: medium
The Tribunal treated market value for AIM/unquoted shares under s.272/273 as the price a reasonably prudent purchaser would pay based on available (public) information, with expert valuation evidence acting as the appropriate proxy for that hypothetical purchaser; where limited/illiquid transactions exist they may be discounted if they cannot be reconciled with other reliable indicators, while arm’s‑length negotiated consideration and subscribers’ subscription prices can be meaningful indicators of market value.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The judgment suggests that evidence of individual purchasers’ motives or non‑expert investor behaviour does not substitute for expert valuation evidence as a proxy for the prudent purchaser, and that HMRC delay in enquiries does not automatically bar determination on the merits absent a successful abuse‑of‑process finding.