Attorney-General for Ireland v Jameson: CA 1905

The court was asked as to the valuation of shares. The shares were subject to restrictions on transfer.
Held: The price which the shares would fetch if sold on the open market should reflect the terms on which the purchaser would be entitled to be registered.
Holmes LJ said: ‘The Attorney-General and the defendants agree in saying that in this case there cannot be an actual sale in open market. Therefore, argues the former, we must assume that there is no restriction of any kind on the disposition of the shares and estimate that (sic) would be given therefore by a purchaser who upon registration would have complete control over them. My objection to this mode of ascertaining the value is that the property bought in the imaginary sale would be a different property from that which Henry Jameson held at the time of his death. The defendants, on the other hand, contend that the only sale possible is a sale at which the highest price would be andpound;100 per share, and that this ought to be estimated value. My objection is that this estimate is not based on a sale in open market as required by the Act. Being unable to accept either solution, I go back to my own, which is in strict accordance with the language of the section. I assume that there is such a sale of the shares as is contemplated by article 11, the effect of which would be to place the purchaser in the same position as that occupied by Henry Jameson.’
Fitzgibbon LJ said: ‘The price was to be that which a purchaser would pay for the right ‘to stand in Henry Jameson’s shoes,’ with good title to get into them and remain in them, and receive all the profits, subject to all the liabilities, of the position. The price was what the shares were worth to Henry Jameson.’

Judges:

Holmes, Fitzgibbon LJJ

Citations:

[1905] 2 IR 218

Statutes:

Finance Act 1894

Cited by:

CitedGrays Timber Products Ltd v Revenue and Customs SC 3-Feb-2010
An assessment to income tax had been raised after the employee resold shares in the company issued through the employees’ share scheme at a price which the Revenue said was above the share value. The company appealed against a finding that tax was . .
Lists of cited by and citing cases may be incomplete.

Taxes Management, Ireland

Updated: 15 May 2022; Ref: scu.396596