The original, and seminal, case informing the CGT treatment of Earn-outs, and leading on to various legislative additions to the CGT code, is Marren v Ingles (1980) 54 TC 76.

This case concerned deferred consideration that was wholly unascertainable and contingent, and confirmed that the right to such consideration was a ‘chose in action’. As is well known, it was the market value of the right, at the time it was obtained (that is, on Completion of the share sale), that was to be brought in by selling shareholders as consideration for the disposal of their shares, for CGT purposes

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