Tax
How to value a database for tax when it is bought with a company
Updated
Tax law names the database. In the US it is an information base, a section 197 intangible; in the UK, HMRC's corporate intangibles manual covers the taxation of intangible assets.
The US: section 197
Section 197 lists business books and records, operating systems and any other information base, including lists of current or prospective customers, as section 197 intangibles; one acquired and held in connection with a trade or business is deducted ratably over 15 years from the month of acquisition. The regulations add that a customer-related information base is any that includes lists or other information about customers.
When the value sits in the shares
Where the database's value shows up in the shares, the section 409A regulations ask, for the stock options and other stock rights a US company grants, for the reasonable application of a reasonable valuation method for stock not readily tradable on an established securities market, and HMRC's Shares and Assets Valuation Manual sets out how it values shares in unquoted companies for Inheritance Tax and Capital Gains Tax.