Why is a contemporaneous valuation important?

Because HMRC may revisit the gift during the seven-year PET window or after the donor's death. A valuation prepared at the date of gift, with documented methodology and evidence, is far more defensible than an after-the-event reconstruction prepared years later.

Does Business Property Relief apply?

Generally yes for gifts of qualifying unquoted trading company shares held for at least two years - at 100% relief from inheritance tax. The relief is fact-specific and should be confirmed with a tax adviser; our valuation is independent of the relief position.

What are the related-property rules?

Section 161 IHTA can require minority holdings held by spouses or other connected parties to be valued together as a single block, increasing the value attributed to the gifted shares. We address this explicitly in the report where relevant.

Can the same valuation be used for CGT hold-over relief?

Often yes. The open-market value used for IHT also serves as the base cost passed to the donee under hold-over relief. We confirm this with the family's tax adviser as part of our scope.

Do you advise on the structure of the gift?

No. Optival provides the independent valuation report. The structure of the gift, choice of recipient (individual or trust) and tax planning sit with the family's tax adviser and solicitor.

Gift & IHT Valuations

Gift & Inheritance Tax (IHT) Valuation UK

Defensible open-market values for lifetime gifts of UK private company shares - supporting estate planning, potentially exempt transfers and family succession.

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What is a gift / IHT share valuation?

Lifetime gifts of unquoted shares - typically from founders to children, family trusts or other family members - are a common tool in UK estate planning. The shares are valued at open-market value at the date of the gift, with the value driving any immediate tax charge and the seven-year clock for inheritance tax purposes.

Where the gift qualifies as a potentially exempt transfer (PET) and the donor survives seven years, no inheritance tax is payable. Where the donor does not survive, or where the gift fails to qualify as a PET, the open-market value at the date of gift becomes a key input to the IHT calculation.

An independent valuation contemporaneous with the gift is the strongest evidence of value if HMRC later raises questions during the donor's lifetime or after death.

When is it required?

Family succession planning

Gifting shares to the next generation as part of a structured handover of the family business.

Trust transfers

Settling shares into a family trust, where the value at transfer drives any immediate IHT charge and trust accounting.

Locking in value before growth

Gifting shares now to crystallise value at today's level, removing future growth from the donor's estate.

Hold-over relief claims

Where the gift qualifies for hold-over relief from CGT, the valuation supports the claim and the donee's base cost.

Our methodology

Gift valuations apply the same open-market value test as probate (section 160 IHTA 1984) - the price the shares would fetch if sold on the open market at the date of the gift between unconnected parties.

Earnings or asset-based anchor

For trading companies we apply earnings multiples calibrated to listed comparables and recent UK transactions; for asset-rich businesses we anchor on adjusted net assets.

Discounted cash flow cross-check

Where the company has reliable forecasts and material growth dynamics, a DCF cross-check tests the multiples-based conclusion.

Minority and marketability discounts

Lifetime gifts typically transfer minority holdings - we apply evidenced discounts for lack of control and lack of marketability calibrated to restricted-stock studies.

Related property considerations

Where the donor and connected parties together hold a controlling interest, the related-property rules in section 161 IHTA may apply, increasing the valuation of the gifted shares.

Key UK considerations

Open-market value as defined under section 160 IHTA 1984 - the same basis as probate.
Related-property rules (section 161 IHTA) can materially increase the value of a minority gift where the donor and connected parties together hold control.
Business Property Relief may apply to gifts of trading company shares - typically 100% on qualifying private company shares held for two years or more.
Hold-over relief from CGT may be available on gifts of business assets, in which case the donee inherits the donor's base cost.
A contemporaneous independent valuation is the strongest defence if HMRC challenges the figures during the donor's lifetime or after death.

Optival provides independent valuation advice. We are not a regulated tax adviser and do not act for clients in dealings with HMRC.

Timeline & deliverables

Standard gift valuations are delivered within 5 working days of receiving complete information. Where coordination with the family's tax adviser or trust solicitor is required, we are happy to work to their timeline.

Independent valuation report at the date of gift
Related-property analysis where applicable
Comparables schedule and discount evidence
Summary letter suitable for the family's tax adviser and IHT records

Delivered as part of

HMRC & Tax Valuations

Gift and IHT valuations sit within our HMRC & Tax Valuations tier (from £1,950) - independent, fixed-fee and clearly documented for use by family members, trustees and their advisers.

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Gift Valuations FAQ

Common questions from founders, advisers and finance teams.

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Planning a lifetime gift?

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