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C2.109 The market value rule

Generally the consideration for a disposal is the amount paid by the buyer to the seller but in some circumstances the consideration that actually passes is ignored and market value is substituted instead.

The consideration for the disposal of an asset is deemed to be its open market value at the date of the disposal in the following circumstances:

1. Ìý

   (a)ÌýÌýÌýÌý gifts or transactions otherwise than by way of a bargain made at arm's length; these include settlements and additions to settlements¹

2. Ìý

   (b)ÌýÌýÌýÌý distributions from a company in respect of shares in the company, for example a distribution of shares in another company²

3. Ìý

   (c)ÌýÌýÌýÌý disposals made wholly or partly for a consideration which cannot be valued³

4. Ìý

   (d)ÌýÌýÌýÌý assets transferred in connection with the loss of office or employment or a diminution of emoluments of the recipient or another person⁴, where an employee pays consideration less than the market value for an asset transferred by his employer HMRC apply the market