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Valuation Report for Share Transfer

There are complicated HMRC tax reporting rules when unquoted shares are provided to employees or directors by their employer. If the assessment is not accepted by HMRC the company can face an unexpected tax bill, interest and penalties. The question is what are the shares in a private company worth for tax purposes? Inevitably expert valuation assistance will be required.

Working out market value

There is no standard approach to share valuation and different businesses require different valuation methodologies. HMRC apply a concept of open market value – i.e. based on the theoretical assumption there is a willing buyer and a willing seller. It is assumed that the shares can be transferred freely.

Whilst HMRC will accept that start-up companies with limited assets and no trading history usually have a low value, for established trading companies the taxable value of shares provided to employees or directors requires analysis of an appropriate methodology or variety of different methodologies. The methodology or methodologies will depend upon the business sector and the desired outcome.

Restrictions – such as the imposition of hurdles often seen in growth share issues, which have to be achieved before rights arise - can reduce the taxable value of unquoted shares. Furthermore, unless the whole shareholding is sold, the value of proportional or minority holdings can be discounted to reflect the lack of control over the company’s affairs that such shareholdings have. HMRC does not give guidance on discount levels and the appropriate discounts have to be calculated by a specialist on a case by case basis.

R A Valuation Services has considerable experience in preparing Valuation Reports in connection with share transfers for all types and sizes of private limited companies in the UK and Europe.

We are happy to explain the process and what you would need to provide, so why not phone the office on 01425 402 402.

PROFESSIONAL BUSINESS VALUATIONS

Valuation Report for Share Transfer

REASONS FOR A VALUATION

An expert business valuation supported by a professionally prepared Valuation Report from an independent and authoritative source is an essential aid for:

  • Acquisition and divestment negotiations
  • Management buy-out and management buy-in
  • Business sale and business purchase
  • Director, shareholder, partner change
  • Restructuring
  • Matrimonial / divorce settlements
  • Dispute resolution
  • Litigation
  • Tax planning (e.g. EMI schemes), tax agreements and tax disputes
  • Incorporation
  • Borrowing and funding
  • Business development
  • Strategic planning
  • Performance benchmarking and indicators
Valuation Report for Share Transfer

RECOGNISED AUTHORITY

Valuation Reports produced by R A Valuation Services Ltd are bespoke and geared to each client’s individual circumstances and requirements; they are definitive and realistic in the market place. As we are recognised as expert witnesses for supplying Valuation Reports to UK courts and HMRC queries/challenges, we are acknowledged to be the authoritative business valuer by:

  • HMRC including:
  • Shares and Assets Valuations (SAV)
  • Valuation Office Agency (VOA)
  • UK Courts
  • Banks
  • Other lenders and financial intermediaries
  • Tax specialists
  • Accountants

R A Valuation Services' Valuation Reports are tailor-made for their purposes, definitive and realistic in the market place. Indeed, such is their authority that an R A Valuation Services' Valuation Report is normally insisted upon in support of negotiations.