If a valuation report is prepared for an inherited property and if that same property is then sold a few months later for a purchase price significantly higher than the value determined in the appraisal, the Supreme Tax Court clarified that neither the appraisal nor the purchase price takes precedence from the outset. However, under certain conditions a properly prepared value appraisal may be suitable as evidence of the lower fair market value.
When valuing an unlisted share in a corporation for gift tax purposes a constant flat-rate holding markdown is not acceptable. The market value of an unlisted share in a corporation can only be derived from sales between third parties if the sales take place in the normal course of business and in accordance with ongoing market principles, the Supreme Tax Court said in a most recent judgment.
The finance ministry has called upon tax offices to follow a Supreme Tax Court judgment prohibiting a write down of fixed-interest securities to their lower current market rate where there is no risk of ultimate loss.
