Share schemes offer a cost-effective way to motivate your team – acting as an incentive for employees to stay and help grow the company. Employees rewarded with equity are likely to be more productive and understand that contributing to the success of the company will increase the value of the capital they hold.

When implementing Government approved share option schemes it is recommended that the value of a company is agreed up front with HMRC. This not only assists the company in setting the exercise price for the share options, but also helps to reduce the risks of future challenge from HMRC and unexpected tax liabilities.

For non-approved schemes a valuation is still recommended, again so the company has certainty and can defend any potential future challenge from HMRC.

HMRC also expects certain valuation methods to be used in certain situations, further emphasising the need for a business valuation expert.

With their accumulated experience, our technical experts are ideally placed to assist with preparing a tax value of your shares.

• We will advise, where required, on which type of scheme is most appropriate to suit your needs.
• We can advise on share classes and the number of shares to be covered by the scheme.
• Our valuations team will consider the financial information and other matters you have provided to determine an appropriate share valuation.
• Upon agreement we will submit our valuation to HMRC for acceptance when necessary.

As well as share schemes, valuations are required for a wide range of purposes which have the potential for tax consequences.

We can provide valuations for the following purposes:

• Inheritance Tax planning;
• Probate;
• All other types of share valuations;
• Capital Gains Tax disposals; and
• Goodwill valuations.

We prepare HMRC compliant valuations and will produce robust documentation when an up-front agreement with HMRC is not possible.