Definitions of value

There are several different definitions of value for UK tax purposes, depending on the relevant charging provision. Each definition can deliver a substantially different value for the same asset, meaning there is a different tax outcome if the wrong definition is applied in any given situation.

Each definition is supported by a different statutory framework, case law, precedent and practice. It is important that valuations for tax purposes are performed by specialists who thoroughly understand these distinctions. A valuation which delivers ‘fair market value’ will, at best, be a rough approximation of the correct definition of value for tax purposes.

Other definitions of value may be in point in non-UK jurisdictions.