How can I value these shares?

How can I value these shares?

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A client is a beneficiary of a long established family trust. The only property in the trust are shares in his late father’s property investment company. Presumably when those shares were first transferred into the trust in 1985, a claim for holdover relief was made (the shares qualified as a ‘business asset’ back then).

The trust is due to be wound up so a similar claim for hold over relief will be made when the shares are transferred to my client and his brother (who is also a beneficiary) There should be no exit charge on the trust as the shares are worth less than the IHT threshold.

The beneficiaries will  ‘inherit’ a base cost of those shares, at their March 1982 value, obviously relevant if they dispose of those shares in the future.. That’s the difficult bit…………there are no company records going back that far. So how can one establish a value of the shares way back then? I suppose I could try Companies House and get a copy of the filed accounts from 1982 and try and calculate a market value of those shares at that time.

Readers’ views would be much appreciated.

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paddle steamer
By DJKL
06th Aug 2015 20:42

Can HMRC oblige

Long shot but could HMRC oblige with the accounts? I somehow doubt they hold records from that far back but maybe it is possible.

If for any reason HMRC Trusts had been passed the company accounts in the past they are possibly more likely to hold on file, not so sure re the tax records for the actual company with what back then would have been their tax district.

It is amazing how often with property companies one wants to look back at earlier years. I was checking old records this week for a portfolio of properties we purchased in 1991 to check our cost records, as whilst amounts had been recorded exact dates had not and I needed to calculate the indexation if we are to sell one of the properties. (Not made easier in that 2 of the properties  purchased as a job lot had been sold back in 1992 and I also wanted to check the c/fwd cost for the remaining properties, as recorded by my predecessor, were accurate given the earlier disposals- they were)

If records have not been retained may in future be tricky for your clients if they ever decide to sell one of the investment properties still held by the company.

The plus point about property companies is they hopefully have lots of space to store old records, we still hold records from the mid 1970s!!!!!

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