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

Founder, HLN WD TX , Employment Tax

Helen Wood is the founder of HLN WD TX, a share schemes and employee incentives advisory business.She qualified as a CA with ICAS in 2009 and has worked as a specialist reward and incentives advisor for 17 years, spending 13 of those at KPMG followed by 3 ½ years as an Associate Director at RSM. Helen has worked with businesses ranging from start-ups to fully listed companies, spanning owner-managed businesses, private equity portfolio companies, and AIM listed businesses.She advises on a wide range of employee share schemes and employment related securities matters including the design and implementation of effective management and employee incentives; tax valuation of employment related securities, buy and sell side transaction support, HMRC compliance, tax due diligence and employee ownership trust transactions.

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