what discount is typically applied to a 40% minority shareholding by HMRC in respect of a CGT transaction - 1/3rd of the company value is attributable to an
investment property?
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I have no idea about HMRC but in the real world I would be starting in the region of 50% for the size of the shareholding alone.
The investment property factor makes it easier to argue that down than up.
Livens indicates for a P/E model
Livens indicates, for a P/E model, the following, for what it is worth:
For info Livens suggests a discount (From quoted P/E) for a small family company of circa 20% to 40% to quoted P/E
Also then discusses a further discount for size of holding in question of :
100%-90% Nil
90% -75% 5%
75%-51% 10-20%
50% 45%-50% (with no casting vote)
25%-50% 55%-65%
10%-25% 65%-75%
Under 10% 75%-80%
How are you approaching the valuation, on a P/E basis for the overall company or on a P/E basis for the trading augmented by the property investment on a discounted net asset basis?
Two parts
the valuation for the 100% has already been done and agreed on the latter basis - it's just the discount we are "arguing" about
As you have taken a hybrid approach re arriving at the 100% valuation are HMRC indicating using different discounts for each part of the valuation, the "trading" element possibly at say 55-60% but the investment property at a much lower discount? There is possibly justification in valuing as the sum of two parts each with their own discount.