Q&As

When making a section 431 election under the Income Tax (Earnings and Pensions) Act 2003, is it necessary to obtain a professional valuation, or can the company self-certify their valuation in their board minutes?

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Published on LexisPSL on 10/05/2019

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

  • When making a section 431 election under the Income Tax (Earnings and Pensions) Act 2003, is it necessary to obtain a professional valuation, or can the company self-certify their valuation in their board minutes?

When considering offering shares to employees, whether directly and/or pursuant to a share plan, employer companies and company shareholders need to consider the value of the shares for a number of reasons, including to provide information to an employee acquiring restricted shares who will enter into a joint election with the employer company under section 431 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003) and for tax and accounting purposes (in particular, operating Pay As You Earn (PAYE) and national insurance contributions).

Whether a professional valuation is required will depend on the type of shares being issued and

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