UT (Tax & Chancery) UT/2023/000103 - [2025] UKUT 00102 (TCC)

Criticall was a software development company. On 22 September 2014, Coller valued software owned by Criticall. The valuation was carried out by Dr Asher, who had been an IP valuer for more than 14 years and so had significant expertise [181].

MLA supplied Dr Asher with financial reports, business plans and the list of assets to be valued [188]. He was asked to provide an indicative valuation in an email, after which he was told to proceed with a detailed valuation; this was the case not only for Criticall but for 90% of the cases referred to him [190].

Dr Asher was aware of the need to provide conservative valuations [190]. He was not prepared to give a market valuation in the Criticall case because in his view there was insufficient market information available [189]. He valued the software at £105,000, being a midpoint between £87,000 and £122,000. Dr Asher was not subsequently contacted by MLA about the valuation [213].

On 3 November 2014, Criticall assigned its IP rights in the software to its SSAS in exchange for a payment of £110,000, and the SSAS agreed to lease the software back for £2,750 a month for five years. The IP assets were described in the sale and leaseback agreement as “Criticall Limited Software” rather than the specific software which had been valued by Dr Asher [168]. The MLA checklist was signed off, despite the price being undefined, and the trustee resolution was signed only by one of the parties [168].

At the time of the Pension Funding Deal, the value of the assets held in the Criticall SSAS was £143,623. Before the deal was finalised, it was referred to the credit committee because of the high level of pension funds involved, but this did not prevent it going ahead [174]. HMRC subsequently accepted that the Criticall software was worth £85,000 [210].