Method for valuing shares; Net Asset or Dividend Yield

[marc02]

The deceased had gifted shares (within 1 year of death). These shares were in a business whose main function is owning, letting and managing property. At the time the shares gifted were gifted, the deceased was a un-influential minority (less than 22%) share holder.

The revenue has suggested valuing the shares based on the value of the property owned (net asset method). However, in light of the business requiring a high degree of day to day operational effort and the minority holding of the deceased, is there a case to request that the value of the shares should be calculated using the dividend yield method?

[peter@2711.co.uk]

Doubtful if Revenue would agree to value on a Yield basis, because this can easily be manipulated in the case of a Private Company and may not reflect the "Open Market Value" - for Inheritance Tax, the value of an Asset is the Price the asset may reasonably fetch if sold in the open market at date of death.

For 22% of a Private Property Company, it is doubtful whether any 3rd Part would pay more that 15% of the NTA of the Company because there would be No Control and No Market for a easy resale. Suggest you make that Argument with the Revenue together with price details of any "sales" of the Company Shares within 5 years of Death.