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Valuing unquoted shares

Peter Vaines of Field Court Tax Chambers takes an in-depth look at two cases from the first half of 2017 that tackle the valuation of unquoted shares – Cosmetic Warriors Ltd v Andrew Gerrie and Netley v HMRC

Valuing unquoted sharesThe recent case of Cosmetic Warriors Ltd v Andrew Gerrie [2017] EWCA Civ 324 had some interesting things to say about the principles for valuing unquoted shares. In this case, the dispute related to the construction of the company’s Articles of Association which provided a formula for the valuation of the shares, to be used in various circumstances.

Mr Gerrie held approximately 11% of the shares in the company (and his wife had a further 10%). The majority shareholders were a Mr and Mrs Constantine who owned 62% of the company shares.