Q&As

In what circumstances will HMRC give advance confirmation of the value of unlisted shares for employee share acquisitions, and how long will HMRC’s agreed valuation remain valid for?

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Published on LexisPSL on 11/02/2020

The following Share Incentives Q&A provides comprehensive and up to date legal information covering:

  • In what circumstances will HMRC give advance confirmation of the value of unlisted shares for employee share acquisitions, and how long will HMRC’s agreed valuation remain valid for?

In what circumstances will HMRC give advance confirmation of the value of unlisted shares for employee share acquisitions, and how long will HMRC’s agreed valuation remain valid for?

Companies and their advisers can ask Shares and Assets Valuation (SAV) at HMRC to agree the value of shares for the purposes of planned grants under tax advantaged enterprise management incentives (EMI) schemes, company share option plans (CSOPs), share incentive plans (SIPs) and save as you earn (SAYE) schemes. However, since 31 March 2016 SAV no longer provides pre-transaction rulings on valuation in other cases, although it may be requested to do so in exceptional circumstances where a substantial number of employees is involved.

In the case of CSOPs, SAYE schemes and SIPs, it is normally the case that the market value of unquoted shares will be negotiated with SAV before the relevant options or awards are granted, although there may be occasions where the valuations do not need to be agreed with SAV, provided that an agreed formula has been followed. For EMI schemes, there is no statutory requirement to agree share value with HMRC, but it is normal practice to do so.

In relation to the tax advantaged schemes referred to above, it should be noted that, once HMRC has provided its agreement to share value, the length of time that the HMRC valuation remains valid for

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