Fiscal share valuations

Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance

Fiscal share valuations

Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance
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Valuations may be required for tax purposes in many different scenarios, including:

  1. on grant of share options to employees in a tax-advantaged share scheme

  2. where the taxpayer elects to ‘rebase’ assets to their value as at 31 March 1982

  3. where assets are transferred between connected parties

  4. where shares are acquired at undervalue by reason of someone’s employment

This guidance note is concerned with share valuations for tax purposes. For guidance on performing share valuations more widely, including for commercial purposes, and the risks involved for the practitioner , see the Professional valuations guidance note. For guidance on specific commercial valuation methods which may also be relevant to tax valuations, see the Measures and methods of valuation guidance note.

Definitions

There are two relevant definitions in the Taxes Acts for the purpose of private company share valuations.

‘Market value’ is defined in TCGA 1992, s 272 and in IHTA 1984, s 160. It is essentially the amount which could be fetched on the open market between an arm’s length vendor and purchaser. The statutory

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  • 20 Aug 2024 11:11

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