£477m pulled in from CGT probes in 2025/26 according to the FT.
I am sure you all read the papers regularly. In the run up to the Autumn Statement the business journalist community is running many stories about what it might contain. The lack of leaks from HM Treasury this year is noticeable, so we will all have to wait and see.
Sometimes rather important articles can get missed in the melee.
This article in the FT HMRC claws back nearly £500m in underpaid capital gains, is worth a read if you are a lawyer working in or around corporate law, employment law and all aspects of private client/family law. This clawback was 82% higher than the previous year, but it is the number of probes that also struck me. 9,400 vs 3,200 in 2021-22. This is not just due to there being more people at HMRC, it’s also about their increasingly sophisticated use of AI. The Valuation Office has already made it clear that it is using AI to assist its work.
HM Government needs to balance the books.
We believe that probes and investigations are going to become increasingly focused around the valuation of private company assets. We keep seeing signs that HMRC is using data very intelligently indeed. You can no longer assume that your “transaction” is unlikely to be “noticed”. With the stakes raised your clients will need to make sure their chips are neatly stacked.
The need for properly constituted independent valuations is becoming mainstream. As lawyers you may wish to advise your clients to double check the valuations they may be relying upon for their tax computations; it may even be necessary to get an external expert to sign off on the purchase price of the asset being sold in those calculations. For property, our brethren RICS professionals will be a great defence and for fine art there are great auction houses that know how to value those assets.
When it comes to companies, shares, partnerships, interests in trusts, contracts and other assets, your clients will need the right valuer who understands not only valuation methodologies but the arguments to support the approach used, how to apply case law (including drawing out where case law is weak), if, where and how to apply intangible value and what disclosures are essential to ensure the report is defensible.
We are increasingly seeing demand for expert valuation services. Indeed we are now working for the clients of over 30 of the UK’s top 100 law firms. The more work we do, the more we realise how important the fine detail has become and even more importantly that each case really is unique. Valuation approaches which miss the nuance of that uniqueness brings considerable risk now.
We of course love all types of the valuation work that is in our wheel arch. Whether it is for employment related securities in the UK or internationally, through to super complex arrangements in and around trusts. We now being appointed to work for clients where HMRC has already opened an investigation and specialist expertise is required.
It is a really interesting time.
