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Readers' forum : Proper valuation

26 June 2018
Issue: 4653 / Categories: Forum & Feedback

Calculating the capital gains on sale of shares under the rebasing rules.

Our client is a non-domicile who was not born in the UK and became deemed domiciled from 6 April 2017 under the new rules. She owned 100% of the shares in an unquoted foreign trading company. In May 2018 she sold 20% of her shares to an unconnected third party for a significant amount. As a previous remittance basis user she is entitled to rebase this holding under F(No2)A 2017 Sch 8 Pt 3.

A valuation of the shares has been carried out as at 5 April 2017. Their original cost was nominal being the subscription shares at par.

What is the base cost for calculating the capital gains on the sale under the rebasing rules? Would it be 20% of the full valuation or would a 20% minority valuation be required with the appropriate discount? Our view is that it should be 20% of the full...

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