Stanton v. Drayton Commercial Investment Co. Ltd., [1982] BTC 269, [1982] 2 All E.R. 943 (HL)

A reference in the Finance Act 1965 to "value" should not be taken as synonymous to "market value". In cases where bargains have been made at arm's length, the value agreed upon by the parties is conclusive. Parliament had regard to the practical inconvenience of leaving agreements liable to be reopened to an inquiry as to what the market value was.

Where a taxpayer company satisfies, in accordance with a share purchase agreement, its obligation to pay for the shares it has acquired of a second company by allotting its shares to that second company, the cost base of the acquired shares is not the value or market value of the allotted shares but, in the case of an honest and straightforward transaction, the price upon which the parties have agreed.