Taxation of Chargeable Gains Act 1992, section 272

Valuation: general

Part VIII Supplemental

(1) In this Act “market value” in relation to any assets means the price which those assets might reasonably be expected to fetch on a sale in the open market.

(2)In estimating the market value of any assets no reduction shall be made in the estimate on account of the estimate being made on the assumption that the whole of the assets is to be placed on the market at one and the same time.

[F2060 (3)The Treasury may make regulations as to the manner for determining for the purposes of this Act—

(a)the market value at any time of shares or securities which are included in the official UK list, and

(b)the market value at any time of shares or securities which are listed on a recognised stock exchange outside the United Kingdom.

(4)The regulations may—

(a)make different provision for different cases, and

(b)contain incidental, supplemental, consequential and transitional provision and savings.F2060]

(5) In this Act “market value” in relation to any rights of unit holders in any unit trust scheme the buying and selling prices of which are published regularly by the managers of the scheme shall mean an amount equal to the buying price (that is the lower price) so published on the relevant date, or if none were published on that date, on the latest date before.

[F2061 (5AA) In this Act “market value” in relation to shares of a given class in an open-ended investment company the prices of which are published regularly by the authorised corporate director of that company (whether or not those shares are also quoted in The Stock Exchange Daily Official List) shall mean an amount equal to the price so published on the relevant date, or if no price was published on that date, on the latest date before that date.

(5AB) In subsection (5AA) “authorised corporate director” has the meaning given by subsection (10) of section 468 of the Taxes Act, read with subsections (16) and (17) of that section, as those subsections are added by regulation 10(4) of the Open-ended Investment Companies (Tax) Regulations 1997 ; and accordingly the reference in subsection (16) of that section to “the Tax Acts” shall be construed as if it included a reference to this Act. F2061]

(6)The provisions of this section, with sections 273 and 274, have effect subject to [F2062sections 25A and 41A andF2062] Part I of Schedule 11.

Definitions used in section 272 10

assets

(a) the reference to “assets” were a reference to “property”, and

Defined in Sch.4ZA para.22(2) · see it in the full Act
asset

In this sub-paragraph “asset” includes part of an asset.

Defined in Sch.8B para.6(1) · see it in the full Act
market value

(4) In particular, for the purposes of paragraphs 5 and 7 of this Schedule “market value” has the meaning given by paragraph 92 of Schedule 2 to that Act (determination of market value); and Part 8 of this Act has effect subject to this paragraph.

Defined in Sch.7D para.1(4) · see it in the full Act
shares

“shares” includes stock;

Defined in s.288(1) · see it in the full Act

(5) In this paragraph, except in paragraphs (a) to (c) of sub-paragraph (6), “shares” includes an interest in shares.

Defined in Sch.7AC para.10(5) · see it in the full Act

(b) “shares” includes securities,

Defined in Sch.7 para.4(2) · see it in the full Act
the shares

(5) In sub-paragraphs (3) and (4) and in the following provisions of this Schedule references to “the shares” are to the shares referred to in sub-paragraph (1)(a).

Defined in Sch.7ZB para.1(5) · see it in the full Act

(a) references to “the shares” shall be construed in accordance with sub-paragraph (1) above, and

Defined in Sch.5B para.13(12) · see it in the full Act
securities

(6) In sub-paragraph (4)(d) “securities” has the same meaning as in section 132.

Defined in Sch.4B para.12(6) · see it in the full Act

(2) In sub-paragraph (1)(a) “securities” has the same meaning as in section 132.

Defined in Sch.4B para.7(2) · see it in the full Act
recognised stock exchange

“recognised stock exchange” has the meaning given by section 1005 of ITA 2007 ;

Defined in s.288(1) · see it in the full Act
class

“class”, in relation to shares or securities, means a class of shares or securities of any one company;

Defined in s.288(1) · see it in the full Act
company

“company” includes any body corporate or unincorporated association but does not include a partnership, and shall be construed in accordance with section 99 ;

Defined in s.288(1) · see it in the full Act

(5) In this paragraph “company” and “group” shall be construed in accordance with section 170(2) to (9).

Defined in Sch.2 para.5(5) · see it in the full Act
the Taxes Act

“the Taxes Act” means the Income and Corporation Taxes Act 1988 ;

Defined in s.288(1) · see it in the full Act

Cases considering section 272 7

Grays Timber Products Limited v Her Majesty’s Revenue and Customs (Scotland)

[2010] UKSC 4 · 3 February 2010Limits

Interpreted market value as the open-market price of the particular asset requiring valuation. Only rights acquired with the shares were valued; a personal entitlement extinguished on completion was excluded (see paras [22]-[25]; [37]-[43]; [49]-[52]). Noted as preventing a valuation reduction based on the assumption that all the assets are marketed simultaneously (see para [22]).

The Commissioners for HMRC v Zyrieda Denning & Ors.

[2022] EWCA Civ 909 · 1 July 2022Defines

The court applied the statutory open-market definition of market value to the leasehold interests. The valuation method did not permit separating transferable goodwill from the property interest. (see paras [8]-[9]; [65]-[66])

Chifley Holdings Ltd (BVI) v The Commissioners For HMRC

[2024] UKUT 301 (LC) · 25 September 2024Defines

The Tribunal applied the incorporated definition of market value as the price reasonably expected on an open-market sale. That definition governed the retrospective valuation exercise. (see paras [18]; [131])

What each judgment says about section 272 is in the case-law panel in the full Act.

Amendments and notes

11 notes from legislation.gov.uk

Amendments

  1. F2060S. 272(3)(4) substituted (with effect in accordance with Sch. 26 para. 4(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 26 para. 4(1); S.I. 2015/635, art. 2
  2. F2061S. 272(5AA)(5AB) inserted (28.4.1997) by The Open-ended Investment Companies (Tax) Regulations 1997 (S.I. 1997/1154), regs. 1(1), 22(b)
  3. F2062Words in s. 272(6) inserted (19.7.2006) by Finance Act 2006 (c. 25), Sch. 9 para. 6(2)

Modifications

  1. C428S. 272 applied (retrospective to 11.1.1994) by Finance Act 1994 (c. 9), s. 252(3), Sch. 24 para. 18(5)
  2. C429S. 272 applied by Income and Corporation Taxes Act 1988 (c. 1), ss. 591C-591D (as inserted (with effect in accordance with s. 61(3) of the amending Act) by Finance Act 1995 (c. 4), s. 61(1))
  3. C430S. 272 applied (E.W.S.) (8.11.1995) by Gas Act 1995 (c. 45), ss. 17(1), 18(2), Sch. 5 para. 10(2)
  4. C431S. 272 applied by Building Societies Act 1986 (c. 53), s. 102C(3) (as inserted (with effect in accordance with s. 2(2) of the amending Act) by Building Societies (Distributions) Act 1997 (c. 41), s. 1(1))
  5. C432S. 272 applied (22.7.2004) by Finance Act 2004 (c. 12), s. 278(1) (with Sch. 36)
  6. C433Ss. 272-274 applied (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), ss. 210(1), 1184(1) (with Sch. 2)
  7. C434S. 272(2)-(4) applied (27.7.1993) by 1993 c. 37, s. 12, Sch. 2 Pt. I para. 24(5)
  8. C435S. 272(5) applied (with modifications) (with effect in accordance with art. 1(2)(3), Sch. 1 of the affecting S.I.) by The Offshore Funds (Tax) Regulations 2009 (S.I. 2009/3001), regs. 1(1), 10(2)