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C2.120 The open market principle

As described in C2.109 there are specific circumstances when the consideration for the disposal of an asset is deemed to be its market value. In these instances, the market value must be determined as the price which the asset might reasonably be expected to fetch on a sale in the open market¹. This is as between a willing seller and a willing buyer bargaining on equal terms and at arm's length, so that the price given or received would represent a fair and true price for the asset.

HMRC do not accept arguments that the market value should be increased because the vendor would only have sold the asset for a sum substantially in excess of the true value of the asset. HMRC do, however, consider that the existence of a special purchaser who, because of their particular circumstances, would be prepared to pay a sum in excess of the true market value may drive up the market