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A library of key cases relevant to Valuation Community members, with links to the judgments on the British and Irish Legal Information Institute (Bailii) website and details of related articles held by the ICAEW Library and Information Service.
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Developed by the ICAEW Library & Information Service on behalf of the Valuation Community committee.
The ICAEW Library and Information Service can also supply ICAEW members and ACA students with the case transcript and related commentary. Additionally a number of the valuation books in the Library collection highlight relevant cases.

Capital gains tax

Balloon Promotions Ltd & Ors v Revenue and Customs
[2006] UKSPC SPC00524
The appellants were appealing against HMRC's decision to refuse rollover relief under section 152 of the Taxation of Chargeable Gains Act 1992 in respect of chargeable gains arising from the appellants' sale of their franchised restaurants to Pizza Express. The appellants contended that part of their chargeable gains related to the sale of goodwill. HMRC published the commentary Capital gains tax: treatment of goodwill in franchised businesses afterwards, which summarises the salient acts and sets out their views on the implications of the decision.

The following related article is available on request from the ICAEW Library and Information Service team:

  • A bit of an animal
    Taxes the Weekly Tax News, 21 August 2006, pages 813-815
    Article investigates the menagerie of new issues to do with goodwill raised by Balloon Promotions Ltd and Ors v Revenue and Customs. 

Bullivant Holdings Ltd v IRC
[1998] STC 905, 71 TC 22
This case concerned whether the full and fair price was given for shares in a publishing company. The Library and Information Service can supply ICAEW members and ACA students with the case transcript and related commentary.

The following related articles are available on request from the ICAEW Library and Information Service team:

  • Bullivant bulletin
    Taxation Practitioner, September 1998, pages 11-13
    The author discusses the recent case of Bullivant Holdings v Inland Revenue [1998] STC 905, and asks whether one can learn anything with regard to valuation.
  • Arm and a leg
    Tax Journal, September 1997, pages 13-14
    The author examines the case of Bullivant Holdings Ltd v IRC, which deals with the connected party provision of TCGA 1992 s18(2) and the open market requirement of s17(1).  

Crabtree v Hinchcliffe
[1972] AC 707, [1971] 3 All ER 967
The taxpayer contended that, in view of take-over negotiations in progress for a public company (negotiations which the London Stock Exchange was unaware of), the market value of the shares on 6 April 1965 should be assessed at 51s rather than the quoted price of 42s 6d. Judgement made that there were no ‘special circumstances’ and the capital gains tax was properly computed on the basis of the price quoted on the London Stock Exchange.

Denekamp v Pearce (Inspector of Taxes) 
[1998] STC 1120
John Charles Denekamp (the taxpayer) appealed the decision of a Special Commissioner [71 TC 213]. The case concerned the valuation of shares which did not include any element of goodwill, with the taxpayer contending that the Special Commissioner should have used a higher figure including goodwill in order to calculate the value of the unquoted company. The Library and Information Service can supply ICAEW members and ACA students with the case transcript and related commentary.

The following related articles are available on request from the ICAEW Library and Information Service team:

  • Discount for minority holding in unquoted company
    Taxline, April 2000, page 8
    Reports that the case of Denekamp v Pearce highlights the arbitrary nature of the discount appropriate for a minority interest from the full company value. Concludes that discounts generally for uninfluential minority holdings are unlikely to be unduly affected by the decision.

  • Valuation of unquoted shares: Denekamp v Pearce
    Capital Tax Planning, April 1999, pages 64-66
    The Denekamp v Pearce case was mentioned briefly in a previous article as an illustration of the perils of conducting a tax appeal without professional advice. This article considers the case in the context of its being an exercise in share valuation.

Dyer (JD Designs) v HMRC
[2016] UKUT 0381 (TCC)/Appeal no: UT/2015/0086
This Upper Tribunal Tax and Chancery Chamber decision upheld the earlier decision from the FTT (TC2012/10201/10360) that the shares were of negligible value when they were acquired and the CGT principle that the shares have to be valued subject to the rights attaching to them at the valuation date without regard to any arrangements which would have been put in place prior to a sale.

Company share valuation

Administrators of the Estate of Caton (deceased) v Couch (Inspector of Taxes)
[1997] STC 970
The deceased held 2,495,552 ordinary shares in a company which was not quoted on a recognised stock exchange. A Special Commissioner allowed the administrators' appeal holding that in determining the market value of the shares at the date of death it should be assumed that unpublished information relating to the trading profits and budget forecasts of the company, and unpublished information relating to a possible sale of the company, would be available to a purchaser. The Library and Information Service can supply ICAEW members and ACA students with the case transcript and related commentary.

The following related articles are available on request from the ICAEW Library and Information Service team:

  • Loggerheads and log-jams
    Taxation, 22 January 1998, pages 379-380
    The article looks at the appeals procedure when negotiating with the Share Valuation Division. The decision of Couch v Administrators of the estate of Caton deceased [1997] STC 970, that professional costs incurred in negotiating a share valuation with the Inland Revenue are not deductible for capital gains tax, underlines the importance of preparing a comprehensive initial valuation report.

The Attorney General of Ceylon v Charles William Mackie (Junior) and another the Executors of the Will of Charles William Mackie, deceased
(Ceylon) [1952] UKPC 31 (6 October 1952)
This case concerned the valuation of rubber merchant shares. The company’s profits varied to an extreme degree due to rapid fluctuations in the price of rubber. The shares were originally valued at the price they would have fetched if sold on the open market on the date of the deceased’s death, but on appeal the valuation was reduced, with a question raised as to whether it would have been possible to find a buyer for the large block of shares in 1940. Judgement made that the deceased’s holding could not have been sold in September 1940 at a price based on any higher figure than the value of the tangible assets of the Company.

Burnden Holdings (UK) Ltd v Fielding & Anor 
[2019] EWHC 1566 (Ch) 
Each side presented expert accountancy evidence to value the Burnden group of companies, which were mainly involved in the business of manufacturing and selling conservatories but included Vital, a construction consultancy in the combined heat and power sector. Alternative valuations using both an earnings-based and a discounted cash flow (DCF) approach were presented. 

See related articles:

Chilukuri & Anor v RP Explorer Master Fund 
[2013] EWCA Civ 1307
An appeal on quantum concerning a Chancery Division judge's valuation of a minority shareholding in an overseas company. The discounted cash flow method was used. Case refers to ‘the principle of reality.

Clark (executor of Clark, deceased) v Green (Inspector of Taxes)
[1995] STC (SCD) 99
The executors appealed against the Revenue’s assessment of the worth of shares the deceased held on the date of her death. The Revenue proposed that unpublished information relating to the profits of the company and a possible sale would be available to a prospective purchaser of the shares. The Library and Information Service can supply ICAEW members and ACA students with the case transcript and related commentary.

The following related articles are available on request from the ICAEW Library and Information Service team:

  • Valuing unquoted shares: the allowance for unmarketability
    Capital Tax Planning, February 1997, pages 40-43
    The author considers the principal factors affecting the valuation of unquoted shares, one of which is the appropriate dividend yield. The author looks at some important cases including Clark v Green [1995] SpC5.
  • Share valuation: the Yorkshire Switchgear cases
    Capital Tax Planning, September 1995, pages 124-129.
    The author summarises two recent decisions of the Special Commissioners which throw light on the information reasonably required for valuing unquoted shares. The cases are Caton's Administrators v Couch [1995] SpC6 and Clark v Green [1995] SpC5.

Crowley v Giles and Bessell
[2015]
The petitioner sought an order under section 994 of the Companies Act 2006 for his shares to be purchased by the other shareholders. The judge found that Mr Crowley's removal as a director and employee of the company BCG Care Homes Ltd, without an offer that his one third shareholding be bought out, was unfair to Mr Crowley. A discounted valuation was not judged appropriate; unusually the judge also decided that Mr Crowley should be entitled to interest.

See related article:

  • Crowley v Giles and Bessell
    ICAEW Valuation Group, January 2016
    Consultant Andrew Strickland analyses the outcomes of this case from a valuation perspective.

David Maguire v 5pm Ltd and Others
(Scots SC 40) [2015]
The expert valuing Mr Maguire's shares did not follow the rules of her own engagement letter, which stated that a final draft would be issued before the final determination valuation report was produced. The lower Court concluded that the expert's valuation report was neither valid nor binding, which the higher Court agreed with on appeal. 

See related article:

  • Instructions to expert valuers
    ICAEW Valuation Community, April 2018
    Consultant Andrew Strickland considers this case and another as an example of the courts over-turning the conclusions of expert determinations.

Davies v Ford & Ors
[2021] EWHC 2550 (Ch)
Two forensic accountants gave evidence to the value of GBRK, a waste management company. Mr Hayward Crouch for the Defendants assessed the value as at 18th October 2011 as being £280,000 while Mr Hall for the Claimant valued the company at that date at £400,000. The Judge preferred an investment made by a party during October 2011 as contemporaneous evidence as to what a investor considered was the actual value of the company.

Davies v Lynch-Smith
[2018] EWHC 2336 (Ch)
In this case two valuation experts gave their evidence concurrently and prepared a joint statement. Both experts agreed that the most appropriate approach to the valuation of the company (a vehicle bodyshop and repair business) was a maintainable earnings approach, and also that if a full discount for majority shareholding applied, an appropriate discount would be 60%.

See related article:

Dean v Prince and Others
[1953] 2 All ER 636
Judgement made that the auditors’ valuation of the deceased’s shares in a light engineering business was incorrect and not binding, as they had disregarded the fact that the shares held by the deceased carried with them the right to control the business. This decision was overturned later in the Court of Appeal - Dean v Prince [1954] Ch 409, [1954] 1 All ER 749.

Destiny Investments (1993) Ltd & Anor v TH Holdings Ltd & Ors Re TPD 
[2017] EWHC 657 (Ch)
A shareholder dispute case which resulted in a valuation determined by reference to asset realisations. Destiny Investments operated three high end hotels.

See related article:

  • Destiny Investments
    ICAEW Valuation Community, December 2018
    Andrew Strickland assesses the valuation judgments used in this case.

Dinglis v Dinglis & Ors 
[2019] EWHC 1664 (Ch)
Order made for the petitioner's shares to be purchased at a discount representing a minority holding, after the judge reached the view that there was no quasi-partnership. A joint statement was provided by the parties' accounting experts. 

See related article:

Doughty Hanson & Co Ltd v Roe 
[2007] EWHC 2212 (Ch) 
PwC was appointed to carry out a valuation of the defendant's shares after he resigned his directorship at Doughty Hanson & Co Limited and gave a transfer notice. PwC issued a final certificate to the effect that in their opinion the fair value of the defendant's shares was £760 per share (thereby valuing his shareholding at £9.3m). The defendant was dissatisfied with PwC's valuation and notified the company that he wished to withdraw his transfer notice. The case concerned whether or not the certificate was a proper certificate as required by the company's Articles of Association and whether Mr Roe was entitled to withdraw his transfer notice.

Foulser & Foulser v HMRC
[2015] UKFTT 220 (TC)
Brian and Doreen Foulser made gifts of their shares in an unquoted food wholesale company, BG Foods, to companies held within insurance bonds. These gifts were subsequently judged to be disposals chargeable to CGT and the gains needed to be calculated in reference to the market value of the shares. The two share valuation experts acting for the opposing parties used different methodology and failed to reach an agreement on the market value of the company. The tribunal preferred the more tried and tested methodology of Mr Glover, the expert acting for HMRC, who used a sample of six companies in the food producers sector in order to estimate a price earnings (P/E) ratio and then took historic adjusted profits in estimating maintainable earnings. The Library and Information Service can supply ICAEW members and ACA students with the case transcript and related commentary.

See related articles:

Global Energy Horizons Corporation v Gray
[2019] EWHC 1260 (Ch)
Valuation of a share interest in Petrosound, an oil and gas ultrasound technology company, with expert evidence given by an experienced forensic accountant. It was concluded that the value of the assets at the valuation date was nil. The Library and Information Service can supply ICAEW members and ACA students with the case transcript and related commentary.

J Netley and HMRC TCO 5904 Appeal number TC/2011/0610
This 2017 Tribunal decision related to the value of shares for gift aid purposes and whether the quoted price was a proper measure of market value. The two valuation experts involved were both Chartered Accountants and experienced valuers.

See related articles:

  • J Netley and HMRC 
    ICAEW Valuation Community, December 2018
    Andrew Strickland notes the similarities with the case of Nicholas Green v HMRC.
  • The joy of giving
    ICAEW Valuation Community, April 2024
    Andrew Strickland discusses Tax Tribunal cases relating to the values to be ascribed to shares in small public companies that have been gifted to charity, with particular reference to J Netley and HMRC.

Mark Simon Reynolds (as liquidator of CSB 123 Limited) v Caroline Stanbury
[2021] EWHC 2506 (Ch)
The expert valuation report and evidence given by the expert appearing for the Applicant was criticised by the Judge, who considered that at points in his oral testimony he "failed to comply with his overriding duty to assist the court". In contrast, Mr Hobby, the expert appearing for the Respondent, received praise for staying within the bounds of his report and research under cross-examination. The Judge preferred Mr Hobby's choice to use the asset approach to valuing the company, which was a fashion styling company. He took into account the impact of personal goodwill and the company's dependence on a single key person with unique attributes. 

See related article:

Martin v Martin 
[2018] EWCA Civ 2866 
A Court of Appeal decision addressing the approach the court should take to the valuation of shares in a private company. The main issue raised was whether the judge had been right to take the valuation of a private trading company as equivalent to cash wealth when dividing assets between a husband and wife. The valuation expert used an earnings basis methodology to value the company.

See related articles:

  • Martin and Martin [2018] EWCA Civ 2866 (Part 1)
    ICAEW Valuation Community, February 2020
    If shares in a private company are worth £20 million, does that equate in value to a bank current account of £20 million, asks Andrew Strickland.
  • Martin and Martin [2018] EWCA Civ 2866 (Part 2)
    ICAEW Valuation Community, February 2020
    A continuation of the previous article which reviewed the work of a single joint expert in valuing the shares of a large family company. How could fair comparison be made between two very different asset classes, cash and share ownership?

Monaghan and Gilsenan – Euro Accessories Limited
[2021] EWHC 47 (Ch)
A case claiming conduct unfairly prejudicial to one or more shareholders (section 994, Companies Act 2006). Company founder Mr Gilsenan gave 24.99% of the shares to Mr Monaghan, the sales director, who later left the company. The Articles included a clause enabling Mr Gilsenan to buy the shares held by Mr Monaghan at 'fair value'. The case related to the meaning of these two words and whether the value of Mr Monaghan’s shares should be discounted to reflect the fact it was a minority shareholding.

See related article:

Murrell v Sanders and Swallow
[2014 EWHC 2680]
Mr Murrell was an employee of a brokerage business set up by Mr Sanders and Mr Swallow; he became a 3% shareholder in the company in April 2002. Mr Murrell was dismissed from the company soon afterwards in October 2002 - in 2009 a court order was made that Mr Murrell's shares should be purchased. The judge then needed to decide whether Mr Murrell's minority shareholding should be valued without discount for its minority status and how the reasonable remuneration of the other directors/shareholders should be computed when valuing the shares.

See related article:

  • Murrell v Sanders and Swallow
    ICAEW Valuation Community, October 2016
    Consultant Andrew Strickland looks at Section 994 in the Companies Act 2006, which deals with unfairness, by analysing the events of the court case Murrell v Sanders and Swallow [2014 EWHC 2680]. 

Nicholas Green v HMRC
[2014] UKFTT 396 TC
This case centred on Nicholas Green's 2007/2008 personal tax return, which included Gift Aid relief claims for £237,500 in shares donated to charity. The shares had cost Mr Green only £60,800 some three weeks earlier. 

See ruling and related articles:

Pinfold v Ansell & Ors
[2017] EWHC 889 (Ch)
Mr Pinfold had a 49% shareholding in the company but was excluded from participation as a director after Mrs Ansell took over the running of the business. He sought an order for Mr & Mrs Ansell to buy out his shares. A single joint expert was instructed to provide a valuation of the share capital as a whole. The judge decided that to ensure fairness, Mr Pinfold's shares should be bought at the value they had at the date of his expulsion.

See related article:

Premier Telecom Communication Group Limited
(EWCA Civ 994) [2014]
In this case it was argued that the valuation experts had strayed into legal territory to address matters which should have been the preserve of the Court by assuming that fair value equated to the IVS definition of market value. The lower Court and Court of Appeal both reached the conclusion that the experts had not made manifest errors and there were no grounds to reject the expert determination. The Library and Information Service can supply ICAEW members and ACA students with the case transcript and related commentary.

See related article:

  • Decisions for the valuers or points for the courts
    ICAEW Valuation Community, April 2018
    In two recent cases in which an expert's conclusions were challenged, lawyers tried to broaden the concept of 'manifest error' by the expert, says consultant Andrew Strickland.

Richards & Anor v I P Solutions Group Ltd
EWHC 2599 [2016]
The parties were unable to agree the market value of the Claimants' shares so instructed E&Y to act as independent valuation experts. Counsel for the Claimants subsequently submitted that in reaching their valuation conclusions the expert valuers had misconstrued the effect of a relevant article in the company's Articles of Association and therefore committed a 'manifest error'. In this instance the Judge sided with the valuers. The Library and Information Service can supply ICAEW members and ACA students with the case transcript and related commentary.

See related article:

  • Decisions for the valuers or points for the courts
    ICAEW Valuation Community, April 2018
    In two recent cases in which an expert's conclusions were challenged, lawyers tried to broaden the concept of 'manifest error' by the expert, says consultant Andrew Strickland.

Singh v Singh
[2017] EWHC 2805 (Ch)
Unfair prejudice proceedings brought under section 994 of the Companies Act 2006. Herinder Singh, a minority shareholder in the hotel management company Edwardian Group Limited, sought an order for the principal shareholders (including his elder brother, Jasminder) to buy his shares without discount for being a minority holding.

See related article:

  • New ground in Section 994 decision
    ICAEW Valuation Community, May 2020
    This case is of some significant interest, explains Andrew Strickland: it breaks new ground and is of relevance for business valuers who have an interest in shareholder disputes.

Smith v Smith
[2022] EWHC 1035
The case concerns a claim under section 994, Companies Act 2006 that the conduct of the affairs of the Company was unfairly prejudicial to one or more shareholders. Joan held 80% of the shares and Tim, an adopted son, held the remaining 20%. When their relationship broke down, Joan dismissed Tim as an employee and also removed him as a director by ordinary resolution. The judge found that the conduct had been unfairly prejudicial to Tim and, as the Company was a quasi-partnership, his shares should be valued on a non-discounted basis.

See related article:

  • When mother and son fall out
    ICAEW Valuation Community, April 2024
    Andrew Strickland discusses the approaches of the valuation experts in Smith and Smith [2022] EWHC 1035.

Swain v Swains Plc
[2015] EWHC 660 (Ch)
[2015] EWHC 1183 (Ch)
[2015] EWHC 2585 (Ch)

A case in which the expert share valuation evidence was taken concurrently (hot tubbing). This was the first such case after the formalisation of the process for giving evidence concurrently in 2013. 

See related article:

UTB and Sheffield United Limited
[2019] EWHC 2322
Two share valuation experts provided reports. The Judge described one valuer as an "orthodox professional valuer" with only limited experience in working with football clubs; in contrast the other valuer was described as deeply immersed in the world of football club transactions, but not otherwise a forensic accountant expert.

See related article:


VB Football Assets v Blackpool Football Club & Ors 
[2017] EWHC 2767 (Ch)
Each side used a valuation expert to provide a report on the value of VB Football Assets’ share in Blackpool FC. David Mitchell took a traditional discounted cash flow valuation approach to valuing the club, while Gerald Krasner took a different approach which took into account the club's position in the English Football League. The two approaches led to starkly different valuations of £59.7 million by Mr Mitchell and £5.5 million by Mr Krasner. The judge found issues with both valuation methods, so ultimately the reports were not used as a basis for the damages to be awarded. 

Wann & Ors v Birkinshaw & Ors 
[2017] EWCA Civ 84
An appeal concerning the valuation of shares in a private company offering self-catering accommodation, following an order for the purchase of the respondent's shares by the appellants. The joint expert acting for the respondent and appellants considered a valuation on the basis of profits (or multiple of earnings) to be the most appropriate method for the company, reflecting the trading potential of the business. However the appellants contended that the valuation did not take into account the company's net borrowings of approximately £1.4 million. 

See related article:

 

  • The problem of debt: Wann & Ors v Birkingshaw & Ors
    ICAEW Valuation Community, February 2018
    Actions under Section 994 Companies Act 2006 are a regular feature of litigation in the UK. The usual remedy in a successful action is the purchase of the shares held by the excluded shareholder, but in this case the outcome was surprising, says consultant Andrew Strickland.

Damages

Ageas v Kwik-Fit (GB) Limited and AIG
[2014] EWHC 2178
A claim arising out of a share purchase agreement. The Kwik-Fit group had sold its insurance broking subsidiary (KFIS) to Ageas, but had misunderstood the terms of a premium financing agreement as provided by Barclays and therefore had not provided appropriately for bad debts on the credit granted to customers for their premiums. The Library and Information Service can supply ICAEW members and ACA students with the case transcript and related commentary.

See related article:

Cardamon Ltd v MacAlister & Anor
[2019] EWHC 1200 (Comm)
A claim for damages arising out of claimed breaches of warranties contained in a share purchase agreement. A chartered accountant and forensic accountant both gave expert evidence on the value of Motorplus, an insurance provider. The Library and Information Service can supply ICAEW members and ACA students with the case transcript and related commentary.

See related article:

Chartbrook Limited (Respondents) v Persimmon Homes Limited and others (Appellants) and another (Respondent)
[2009] UKHL 38
An appeal from [2008] EWCA Civ 183

See related publication:

The Hut Group Limited and Mr O Cookson and Anor
[2014] EWHC 3842 (QB)
This case relates to the valuation of claims under breached warranties, with each party bringing claims against the other. The Library and Information Service can supply ICAEW members and ACA students with the case transcript and related commentary.

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Imperial Chemical Industries Ltd v Merit Merrell Technology Ltd [2018] EWHC 1577 (TCC)
ICI made allegations of defective work against MMT (a specialist engineering piping manufacturer), and instructed MMT to cease work. Each party in the quantum trial called both an expert accountant and a quantum expert who was a quantity surveyor. The experts considered the value of the work carried out by MMT and what damages MMT were entitled to cover as a result of ICI's repudiatory breach of contract. The evidence of ICI’s expert witnesses drew criticism for factual inaccuracy, inconsistency and lack of independence. The experts on both sides were also criticised for a lack of cooperation between them in the preparation of the Joint Statement by the Quantum Experts.

See related article:

Marketing Limited and Typhoo Tea [2016] EWHC 486 (Comm)
A case in which the claimant sought financial recompense for breach of contract and loss of capital value of their agency after an agreement with Typhoo Tea was brought to an end in May 2013. Both valuers used a method starting with price earnings ratios from the public markets.

See related article:

Marathon Asset Management LLP v Seddon and Bridgeman
[2017] EWHC 300 (Comm)
In this case the claimant adopted a 'jackpot damages'approach to computing the quantum of damages that should be paid. Two valuation experts were involved in assessing the value of some 40,000 Marathon documents copied onto USB drives by the defendant when he was a Marathon employee.

See related article:

MDW Holdings Ltd v Norvill, Norvill & Norvill
[2021] EWHC 1135 (Ch)
A breach of warranty and misrepresentation claim. The claimant, MDW, had purchased the entire share capital of G.D. Environmental Services Limited (GDE), a waste disposal company, from the three defendants. MDW subsequently alleged discovery that GDE had been regularly breaching environmental law and that consequently MDW had paid substantially more for the shares than they were worth, had the business been acting lawfully.

Expert evidence was given by two forensic accountants experienced in the valuation of businesses. Both experts analysed the difference between the objective market value of the business on the basis that the warranties were true (Warranty True) and the objective market value of the business with the alleged breaches (Warranty False). Seamus Gates, acting for MDW, used a multiple of Profit After Tax, plus Net Assets, whereas Geoff Mesher for the defendants used a EBITDA method of valuation. The EV/EBITDA approach was preferred by the court as the method more commonly used by professional business valuers.

Sycamore Bidco Ltd v Breslin & Anor
[2012] EWHC 3443 (Ch)
This case concerned alleged warranty breaches in a takeover acquisition. For the case the claimant's valuation expert adjusted the original valuation of the purchased company (Gissings Advisory Services) to £11 million, some £5.5 million less than the price paid - mainly due to a revised treatment of credit notes agreed with Gissings' external IT services provider. The Library and Information Service can supply ICAEW members and ACA students with the case transcript and related commentary.

See related article:

TMO Renewables Ltd v Yeo, Weaver, Reeves, McBraida & Audley
[2021] EWHC 2033 (Ch)
TMO (now in liquidation) made a claim for compensation based on a lost opportunity to develop its scientific research business and assets. Two experts, Mr Patel and Mr Hall, gave expert evidence on company valuation, to address issues relating to the value that the Claimant would have had but for the Defendants' alleged breaches of duty. The expert acting for the defendant felt that they were unable to arrive at a sensible figure, given the lack of evidence available.

UK Ltd & Anor v Primus International Holding Company & Ors
[2019] EWHC 2216 (TCC)
A case involving breach of warranty in respect of a share purchase agreement. Forensic accounting experts (Mr Fisher and Mr Dearman) produced joint memorandums on the quantum issues, using a discounted cash flow (DCF) model. There was some disagreement between the two experts on how the purchase price should be adjusted, with Mr Fisher's calculations being accepted by the judge. Interest on damages awarded at 4.5%. 

that the shares were of negligible value when they were acquired and the CGT principle that the shares have to be valued subject to the rights attaching to them at the valuation date without regard to any arrangements which would have been put in place prior to a sale.

Gift and inheritance valuation

Aschrott, Re, Clifton v Strauss
[1926. A. 260.]
This case concerned whether a) estate duty was payable on stocks, shares and securities in English, South African and American companies and b) on what basis the various securities should be valued. The Library and Information Service can supply ICAEW members and ACA students with the case transcript and related commentary.

Tom Bloxham & Neil McArthur
[2021] TC 08186
A Tax Tribunal appeal concerning relief for gifts of shares to charity and the market value of the shares at three valuation dates.

See related articles:

Battle and another v Inland Revenue Commissioners
[1980] STC 86
The deceased had acted to reduce the amount of estate duty payable on her death. The High Court had to consider the correct method of valuing two 49% shareholdings in a private company owned by her two nephews. The Library and Information Service can supply ICAEW members and ACA students with the case transcript and related commentary.

Buccleuch (Duke) v IRC
[1967] 1 AC 506, [1967] 1 All ER 129
Property assets, including ten land estates (comprising 119,000 acres of land) became subject to estate duty on the death of the deceased. A test estate was valued by the Inland Revenue on the basis of being sold in 486 separate units, whereas the settlement trustees contended that the estate should be valued as if it were sold as one whole, which would be likely to fetch about twenty per cent less. The Library and Information Service can supply ICAEW members and ACA students with the case transcript and related commentary.

Income taxation

Abbott v Philbin - Abbott v Philbin
[1960] 2 All ER 763, [1960] UKHL 1, [1961] AC 352
An appeal relating to an assessment of income tax under Schedule E of the Income Tax 1952. The appeal was dismissed - tax is not payable on the right in the future to receive "salaries, fees, wages, perquisites or profits" but only on those things when received.

Netley v HMRC
Decision number: TC 05904/Appeal number: TC/2011/01610
This case concerned a Gift of Shares arrangement. Valuation evidence was provided by Mr Houghton (for the appellant) and Michael Weaver (for HMRC). The main significance of the decision is that it confirmed that HMRC were correct to look beyond the price quoted on AIM in determining market value. This is consistent with a judgement on an earlier case involving a listing on the Channel Islands Stock Exchange.

Inheritance taxation

Brown's Executors v Inland Revenue Commissioners
[1996] STC (SCD) 277
The Inland Revenue determined that business property relief was not available on Mr B’s unquoted shares as the nature of his company had changed to the making or holding of investments. B's executors appealed against this and won. The Library and Information Service can supply ICAEW members and ACA students with the case transcript and related commentary.

The following related article is available on request from the ICAEW Library and Information Service team:

  • Business relief on short-term deposits: Brown v IRC
    Private Client Business, November/December 1996, pages 350-352
    The author considers the appeal before the Special Commissioners in the case of Executors of the Will of Ralph Louis Brown v CIR. Business relief on shares in a company may be available even though at the relevant time the company's only asset is a deposit account.

Land valuation

Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd 
QB 375, [1995] 2 All ER 769
A lender had advanced money to a borrower on the security of negligently overvalued property. It was judged that the lender was entitled to be compensated for the damage suffered. The Library and Information Service can supply ICAEW members and ACA students with the case transcript and related commentary.

The following related articles are available on request from the ICAEW Library and Information Service team:

  • Modern values
    Accountancy Age, May 1995, page 15.
    A recent Court of Appeal ruling in the case of Banque Bruxelles Lambert SA v Eagle Star and others (BBL) makes the valuation aspect of many professionals' work subject to market fluctuations. The author takes the accountants' viewpoint.
  • Law case review
    Accountancy, June 1995, pages 104-106
    Summaries of some recent law cases with comment, including Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd.

Matrimonial cases

E and L 
[2021] EWFC 60
In this case Mr Justice Mostyn considered it most appropriate to use hindsight to value a business in 2016, contrary to evidence given by two out of three experts (see in particular paras 51 onwards).

FW v FH 
[2019] EWHC 1338
If the main value of a business derives from private equity activity, should conventional valuation methods be employed? Three business valuers were consulted for this case.

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  • The case of FW v FH [2019] EWHC 1338
    ICAEW Valuation Community, November 2021
    Andrew Strickland explains how this divorce case gives an insight into the ways in which deal-based entities should be valued.

Gallagher v Gallagher
[2022] EWHC 53
Case involving valuation of a construction company and the husband's property portfolio, with valuations from a forensic business accountant, tax accountant and two surveyors.

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  • Holding hands on the pavement?
    ICAEW Valuation Community, 2023
    Andrew Strickland reports on this divorce case, in which the redoubtable Justice Mostyn commented on business valuation and the evidence of the two valuation experts involved. Evidence was given using the 'hot tub' method, with both expert witnesses being allowed to politely interrupt each other.

G v T
[2020] EWHC 1613 (Fam)
In this case the parties disputed the value to be ascribed to the husband's interest in B Ltd, a trading business. Although a single joint expert was engaged, the wife also employed a shadow accountant to provide a critical evaluation of the SJE's methodology. The Judge's summary covered the difficulties of valuing a private company, with reference to case law and how experts' valuations should be used in practice by the courts.

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Hart v Hart 
[2017] EWCA Civ 1306
Case involving a 19 year marriage with total assets of £9.4m, of which Karen Hart had been awarded approximately £3.5m. John Hart's businesses had pre-dated the marriage, so were treated as non-matrimonial property. The appeal concerned the approach which the court should take to non-matrimonial property when determining a financial remedy claim by application of the sharing principle.

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  • Valuing assets on divorce
    The Law Society Gazette, June 2019
    Andrew Newbury considers the varying approaches to valuing assets in divorce cases, with reference to a number of important cases including Hart v Hart. 

IX v IY
[2018] EWHC 3053 (Fam)
Following Jones v Jones [2011], this was another case in which the court considered the extent to which to take into account the 'latent potential' or 'spring-board' effect when valuing a company. The judge declined to order a single joint expert in the form of a forensic accountant to value the company. 

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  • Valuing assets on divorce
    The Law Society Gazette, June 2019
    Andrew Newbury considers the varying approaches to valuing assets in divorce cases, with reference to a number of important cases including IX v IY.
  • The spring board and passive appreciation
    ICAEW Valuation Community, 2020
    An article by Andrew Strickland looking at the non-formulaic approach taken by the Judge in this case.

Jones v Jones
[2011] EWCA Civ 41
A divorce case which rested on valuing the husband's North Sea supply business at the time of the marriage and then determining how much of the business sale proceeds should be divided between the husband and wife. A 'spring-board' approach was used to take into consideration the latent potential of the husband's pre-marital skills and knowledge. The Library and Information Service can supply ICAEW members and ACA students with the case transcript and related commentary.

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  • Spring boards and gymnastics
    ICAEW Valuation Community, 2019
    Andrew Strickland explains how the case laid to rest the idea that the high earning capacity of one of the parties to a marriage may itself be an asset to be treated as non-marital property.

Martin v Martin 
[2018] EWCA Civ 2866 
A Court of Appeal decision addressing the approach the court should take to the valuation of shares in a private company. The main issue raised was whether the judge had been right to take the valuation of a private trading company as equivalent to cash wealth when dividing assets between a husband and wife. The valuation expert used an earnings basis methodology to value the company.

OG v AG
[2020] EWFC 52
The valuation of a ducting company by the single joint expert, Mr Hatcher, was well received by the Judge, who described his reports as 'clear and readable'. The single joint expert on tax, Ann Smith, also was considered to have produced a 'very clear, helpful and readable report', calculating the corporation tax payable on investment gains. A discount of 10% was applied to Mr Hatcher's trading element of the valuation by the Judge, to reflect the effects of the economic disruption caused by the Covid-19 pandemic and Brexit.

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  • OG and AG [2020] EWFC 52
    ICAEW Valuation Community, 2023
    Andrew Strickland considers the single joint expert's valuation methods, used to value a jointly run ducting company in this acrimonious matrimonial case.

Robertson v Robertson
[2016] EWHC 613 (Fam)
The husband in this financial remedies case, Mr Robertson, was the founder of the online fashion company ASOS. His shares in ASOS had greatly increased in value during their marriage. The judge treated Mr Robertson's pre-existing shares as half his non-matrimonial property and half matrimonial property of both parties, to be shared evenly.

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  • Robertson v Robertson [2016] EWHC 613
    ICAEW Valuation Community, 2019
    Andrew Strickland provides an overview of the case, which drew glowing comments from the judge on the thoroughness of the valuation expert's report. 

Versteegh v Versteegh 
[2018] EWCA Civ 1050
An appeal case in relation to Camilla Verteegh's application for financial remedies against her husband Gerard. Though a total of £2m had been spent upon valuation experts, the judge had felt unable to make even a "conservative estimate" to the value of G.Verteegh's property business, so had put a 'Wells-sharing' order in place instead. This decision was endorsed on appeal. 

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  • Marital agreements - sharing, needs and foreign property regimes
    Jennifer Perrins, barrister at 1KBW, considers the case of Versteegh v Versteegh on the importance of legal advice in relation to a pre-marital agreement, whether a party has ‘a full appreciation of the implications’ and the appropriateness of making a ‘Wells order’ in this June 2018 article for LexisNexis.

WM v HM
[2017] EWFC 25, [2017] EWCA Civ 41
A divorce case in which the judge approved a linear approach to historic valuation of a business. The Library and Information Service can supply ICAEW members and ACA students with the case transcript and related commentary.

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XW v XH 
[2017] EWFC 76
In this case the court debated what allowance should be made for "passive growth" in the valuation of a non-matrimonial asset and whether the court should make any allowance for the “latent potential” or “springboard” effect within the company. The judge assessed that there was a "significant, though unquantifiable" latent potential in the company, which was not reflected in the conventional valuation that had been conducted.

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  • XW and XH [2017] (EWFC 76)
    ICAEW Valuation Community, 2020
    Andrew Strickland explains how this case highlighted the challenges faced by the Courts when considering three intensely subjective matters to do with business valuations for divorce purposes. 

Negligence

Arenson v Arenson
[1973] 2 All ER 235
In this case an auditor was appointed to value shares, on the basis of which the shareholder (Ivor Arenson) sold shares to the controlling shareholder in the company, his uncle Archy Arenson. A prospectus prepared by the auditor was subsequently issued by the company offering the shares to the public, at a value six times greater than the valuation previously given. On discovering this I.Arenson felt that he had been unfairly treated and brought a case against his uncle and the auditors that the original valuation was erroneous and therefore not binding. The Library and Information Service can supply ICAEW members and ACA students with the case transcript and related commentary.

Begum v Hossain & Anor
(EWCA Civ 717) [2015]
A Court of Appeal case in which an expert determination of the value of a restaurant business was challenged. Although he had been given instructions to consider the accounting records, the expert valuer had not considered the handwritten takings because he felt that it was not the role of a valuer to determine whether they were truthful. The Court of Appeal found that the expert had not followed his mandate and the valuation should be set aside; the valuer could have instructed a forensic accountant to examine the records as he considered this was outside his expertise. The Library and Information Service can supply ICAEW members and ACA students with the case transcript and related commentary.

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  • Instructions to expert valuers
    ICAEW Valuation Community, April 2018
    Consultant Andrew Strickland considers this case and another as an example of the courts over-turning the conclusions of expert determinations.

Property valuation

Campbell v Edwards
[1976] 1 All ER 785
In this case the landlord disputed the figure he paid his tenant for her surrender of the lease on a flat, based on a valuation by Chesterton’s. Two other valuations the landlord subsequently obtained from other surveyors were much lower; he brought an action against the tenant claiming that he was not bound by the original valuation. Judgement made that the original valuation was binding on both parties, appeal dismissed. The Library and Information Service can supply ICAEW members and ACA students with the case transcript and related commentary.

Collier v Mason 
(1858) 25 Beav 200, 119 RR 394
The defendant agreed to purchase a property at a valuation to be made by A - but found the price set by A to be unfair. The court, though it considered A’s valuation very high, ‘and perhaps exorbitant,’ decided there appeared to be no evidence of  ‘fraud, mistake, or miscarriage.’ The Library and Information Service can supply ICAEW members and ACA students with the case transcript and related commentary.

Griffin v Wainwright & Anor
[2017] EWHC 2122
Valuation of minority shareholdings in a boathouse and another property. The court concluded that the expert departed materially from her instructions in relation to the valuation of the boathouse and that her determination was therefore invalid.

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Mundy v The Trustees of the Sloane Stabley Estate
[2018] EWCA Civ 35 
Long leaseholders of an estate in London had challenged the conventional formula set out in the Leasehold Reform, Housing and Urban Development Act 1993 for calculating the required premium to pay for acquiring a lease extension for a new 90 year term (at a peppercorn rent). The leaseholders proposed a new means of valuation - known as Parthenia valuations - which would offer a fairer approach for leaseholders and result in reduced premiums paid to landlords. However, the Upper Tribunal and Court of Appeal decided in favour of keeping the established model set by the Act.

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