Estate Duty Act 1929 · 2020 Revised Edition · Part 3 · Companies
22. Valuation by reference to assets
Feedback & supportWhere there pass on the death of any person dying after 22 April 1940 any shares (not being preference shares) in any company to which this Part applies, then if either —
on the death
“on the death” includes at a period ascertainable only by reference to the death;
there is deemed by virtue of the provisions of this Part to pass on the death a sum of money computed by reference to the value of the total assets of the company; or
the control of the company was immediately before the death in the hands of the deceased,the principal value of those shares for the purposes of estate duty shall not be ascertained in the manner provided by section 24, but shall be ascertained by reference to the value of the total assets of the company.
In cases falling within subsection (1)(a), the value of the total assets of the company shall, for the purposes of this section, be deemed to be reduced by the sum of money therein referred to.
value of the total assets of the company
“value of the total assets of the company” means the principal value, ascertained in accordance with section 24, of all the assets of the company as a going concern, including goodwill, after deducting therefrom —(a)the principal value so ascertained of any debentures, debenture stock and preference shares of the company;(b)all debts of the company incurred or created bona fide for consideration in money or money’s worth;(c)such sum as on a just and fair computation represents any future or contingent liabilities thereof which are uncertain in amount; and(d)the amount of any reserve fund separately invested which is bona fide intended to be applied in payment of pensions to employees or otherwise for the benefit of them or their dependants or relatives, and in no other manner.
For the purposes of this section, the control of a company shall be deemed to be in the hands of a person if —
by virtue of the shares which he controls he has control of more than half the voting power of the company;
he has by virtue of the provisions in the memorandum of association or articles of the company, or other instrument whatsoever constituting or defining the constitution of the company, the powers of a board of directors or of a governing director or the right to nominate a majority of the directors or the power to veto the appointment of a director, or powers of the like nature; or
he has otherwise the right to receive, or the power to dispose of, more than half of the income of the company.