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Tribunal determines the market value of shares gifted to charity

By Mark McLaughlin, November 2021

The First-tier Tribunal determined the market value of shares gifted by the appellants to charity under what HMRC referred to as a ‘charity shell scheme.’  

The appellants acquired shares in a company (‘BBG’), which was the subject of a placing of shares and admission to the Channel Islands Stock Exchange in November 2006. At the same time, BBG acquired the entire share capital of another company (‘BBL’), a well-established bar and pub operator, which at that time operated seven bars and pubs in North West England. 

Following the floatation, both appellants made several gifts of their shares in BBG to charity and claimed income tax relief on those gifts based on what they contended was the market value of the shares at the time of the gifts.  

HM Revenue and Customs (HMRC) opened enquiries into

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