Share valuations are carried out to ascertain the monetary value of stocks and shares in unquoted companies for a variety of different reasons. One often thinks of the common business situations when a valuation of shares in a company would be required. This might be because of the issue of share options to employees or due to a change in business owners where shares are sold or purchased.
There are some less obvious circumstances which also require the value of shareholdings to be determined:
- Calculation of the chargeable gain on a gift of shares for Capital Gains Tax (CGT) and/or Inheritance Tax purposes (IHT). This may be a gift to another entity such as a trust or to an individual.
- Establishing a 31 March 1982 valuation for CGT purposes.
- A valuation of a deceased person’s interests for both probate and IHT purposes.
- A purchase of own shares by a company, for example on an individual’s retirement.
- Declaration of an individual’s assets on a divorce situation.
- Valuation of a trust interest on an exit charge or ten year anniversary charge for IHT purposes.
- Good management of financial affairs and tax planning.
How we can help
Whilst share valuation is a requirement for tax reporting, the value of shareholdings is also crucial to understanding the full extent of an individual’s or family’s financial affairs.
The services we provide in this area include:
- Consultation and advice on share valuations for IHT planning, probate, estate administration and IHT compliance.
- Consultation and advice on share valuations for tax planning and compliance.
- Advice on the value of tax advantaged share schemes such as Company Share Option Plans (COSP), Save As You Earn (SAYE) schemes, Share Incentive Plans (SIP) and Enterprise Management Incentives (EMI).
- Advice on share valuations and applicable IHT reliefs available, such as Business Property Relief and Agricultural Property Relief.
- Communication with HMRC and, in relation to this area, its Shares and Assets Valuations (SAV) department.
Share valuations can be complex and expert knowledge is required for compliance with legislation, as well as ensuring the most tax efficient approach is taken.
For further information, please contact us at Mercer & Hole - click here if you wish to submit an email enquiry to one of our Private Client Partners.
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