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Valuation of unlisted shares

Paul_Treloar_AgeUK
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Anyone come across unlisted shares in the context of MTB entitlement?

Client says she invested ~£18,000 in Australian company many years back and which are apparently worth quite a lot more now.

However, she also says that they are private shares and must be offered for sale to other shareholders but until a “Portal” is formed with a list of shareholders this can’t be done.

Apparently, she has approached a financial advisor and a stockbroker here in the UK and both have said that they can’t help her. 

I have no idea about how these might be valued, anyone got any ideas? Of course, obvious thing to do would be stick in a claim and see what DWP say, but thought I’d test the waters here as well.

Thanks all.

Gareth Morgan
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My, very limited, understanding is that unlisted securities are those that can be traded in an ‘over the counter’ market which is open to all.  Here they’re not in that situation so I’d guess that they are just the same as any other shared asset.  That means needing to value the company and her share of it.  The complexity is how to value the company, where there seems to be no way of doing that using the value of shares, or to assess what an outside purchaser would pay her for her shares knowing what constraints there are on the sale. I’m guessing this a Pension Credit case as otherwise she would have to honestly disqualify herself from MTB by saying resources are greater than £16,000.  Given that it’s then a deemed income case, with a difficult valuation. in a foreign country (with presumably different and potentially complex legal conditions applying), I wouldn’t be surprised to find it quietly put to one side until it gets simpler.  Make the description honestly but in as complicated a way as possible, emphasising the difficulties.  You can then argue, if they do value the shares, about the valuation as any difference of £250 changes the calculation.

[ Edited: 22 Apr 2021 at 12:06 pm by Gareth Morgan ]
Paul_Treloar_AgeUK
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Thanks for that Gareth, yes you’re correct it’s a PC case and that’s certainly some food for thought. I hope that the Pension Service might take a benign approach, especially as you say because they seem to be such uncertain financial products.

Gareth Morgan
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You might want to look at R(IS)2/90 particularly paragraphs 5 to 8.

 

Paul_Treloar_AgeUK
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Diolch Gareth.

Ianb
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Gareth Morgan - 22 April 2021 12:03 PM

...You can then argue, if they do value the shares, about the valuation as any difference of £250 changes the calculation.

Small point but being PC wouldn’t it be a difference of £500 that matters.

Elliot Kent
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See also ADM H1679 - H1681 and legacy equivalent