Shares and Assets Valuation
Growth share valuation and HMRC: the forms and the timings
Updated
A company puts forward its own share value, and GOV.UK publishes two forms that ask HMRC about it, with timings for both routes: its guide to getting a share scheme valuation from HMRC says an agreed EMI valuation is valid for 90 days from the date of the agreement, and the employee shareholder timings follow.
Describe my growth share plan Describe the company, the growth share class and when the shares go out, and we can pass it to a tax adviser or share valuer. The HMRC rules and deadlines are set out on these pages; which of them fit your plan is for the adviser or valuer to say.
The two application forms
GOV.UK publishes VAL231, an application for a share valuation check for Enterprise Management Incentives, and VAL232, an application for a share valuation for a share award under an employee shareholder agreement.
The timings GOV.UK gives
- 4 weeks: once HMRC has all the information it needs, it will try to reach an agreed employee shareholder valuation within this time of getting the request.
- 60 days: how long an agreed employee shareholder valuation is valid, the period in which the shares can be awarded.
Both timings come from GOV.UK's guidance on share valuations for employee shareholder status, so they are that scheme's, not EMI's and not those of a growth share class issued on its own. Check which scheme a growth share award sits in before relying on either.
What a valuation request includes
GOV.UK's guide to getting a share scheme valuation from HMRC lists what to include when asking HMRC to agree a value for a Company Share Option Plan or Save As You Earn scheme, among it a proposed value for the shares and 3 years of accounts before the valuation date, or, where the company is newly trading, any accounts available at that date. For an EMI valuation on VAL231, the guide says you will need to propose the unrestricted and actual market value of any shares under options whose restrictions affect their market value.
The value behind the initial charge
For restricted securities, HMRC's manual ERSM30300 describes an initial money's worth charge on the actual market value less any consideration paid. The unrestricted market value guide covers the election that sets the restrictions aside.