Agreeing share valuations with HMRC

Produced by Tolley in association with

Employment Tax

Guidance

Where allowed by HMRC, it can be useful and desirable to agree with the value of private company shares used in employee share schemes with HMRC’s Shares and Assets Valuation (SAV) team in order to have certainty on the tax treatment for both the employee and the employer.

Where shares are listed on a recognised stock exchange, market value can be determined and relied upon without further reference to SAV using one of the prescribed methodologies found at ETASSUM44160.

Shares listed on the Alternative Investment Market (AIM) or other junior stock exchanges still need to have their value agreed with SAV if comfort is desired that the value can be relied upon. However, in practice, a methodology can usually be agreed upon and used to determine the market value of that grant and all subsequent grants.

What is a share valuation used for?

Where shares issued or acquired on the exercise of options by employees are readily convertible assets (RCAs), the employer must withhold income tax and national insurance

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Helen Wood

, Employment Tax

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