Valid options

The deceased had been the senior partner in a firm of solicitors where his principal involvement had been with the running of private limited family companies. He died in 1994 and his estate included minority shareholdings in each of the companies. He had also made convertible loans repayable on demand to the companies. However on his death he had not demanded repayment or exercised any option to convert the loans.

HMRC issued notices of determination to the executors of the deceased's estate determining the price which the deceased's shares including those he could have received had he exercised his options might fetch on the open market.

The executors appealed saying:

• there was no evidence of the terms of the options;
• the options to convert the loans had prescribed on his death and therefore had no value as they did not exist;...