Rahim Dhanani v The Commissioners for HMRC

Facts

The appellant, Rahim Dhanani, disposed of 50% of his shareholding in Ulysses Healthcare Limited, a holding company whose trading subsidiary provides advanced brain injury care, for £3,300,000. The parties agreed that the disposal was between connected persons and that market value was the deemed consideration for capital gains tax purposes. The appellant had supported the value in his 2016/2017 return with an adjusted net asset valuation built on a Cushman & Wakefield "Special Assumption Valuation" of the care home as a trade related property (TRP). HMRC opened an enquiry under s 9A Taxes Management Act 1970. On 7 May 2024 they issued a closure notice under s 28A TMA 1970. The notice valued the shareholding at £1,050,000, treated the £2,250,000 balance as a distribution and charged £631,818.09. The appellant appealed to the First-tier Tribunal, contending that HMRC had valued a property rather than a business and had ignored goodwill and other intangible assets. HMRC's Statement of Case framed the dispute as a choice between two TRP valuations. In January 2026 the appellant served an expert report that used a discounted cash flow method and valued 100% of Ulysses at £7,000,000. On 7 August 2026 HMRC applied to amend their Statement of Case. They had also applied to rely on expert valuation evidence. Both applications came before the Tribunal at a case management hearing.