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Shares gifted to charity were overvalued for income tax purposes

By Mark McLaughlin, February 2024

Shares in AIM listed companies gifted by the appellants to charity were overvalued for income tax purposes, and the amount of tax relief on the gifted shares was reduced accordingly. 

The appellants gifted shares to charity in 2003 in one or both of two companies (C and SR) and claimed income tax relief for those gifts in their tax returns for 2003/04. The shares in each company had been admitted to the alternative investment market (AIM) on 29 July 2003 and 19 December 2003 respectively. The gifts were made on those dates and for the purpose of claiming relief the appellants valued the shares at 51.25p and 93.875p respectively.  

Following HM Revenue and Customs (HMRC) enquiries into the appellants’ tax returns for 2003/04, closure notices were eventually issued in May and August 2018, amending the relief based on market values of the shares at the date of gifting of 12p for C and 26.68p for SR. This considerably reduced the

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