Guidance

Share valuations: exchange shares for employee rights

Agree with HMRC Shares and Assets Valuation (SAV) the value of shares you want to offer employees in exchange for certain employee rights

Overview

To give you and your employee/future employee assurance as to the value of shares you are offering in exchange for certain employment rights, you can ask SAV to agree what they’re worth.

To grant someone Employee Shareholder Status in your company you would need to award them at least £2000 worth of shares.

Here you’ll find out how you can get your shares valued by SAV and the service you can expect.

How to get your shares valued

To get a valuation for Employee Shareholder Status purposes you must complete and submit the VAL 232 form.

SAV may need to ask further questions based on your answers. It will only ask for information it considers relevant.

If you think there might be some information it hasn’t asked for on the VAL 232 form which may help its valuation, you can provide this with your form on a separate sheet. For example, any special features of the business or financial affairs of the company, directors or shareholders that could be relevant.

See the return address for your form

How long valuations are valid for

Values are agreed for 60 days. You can award the shares for Employee Shareholder Status during this period.

If you have already awarded the shares, the valuation will apply for the date of the award only.

If you don’t award the shares during the 60 day period, you can write to SAV to have the valuation renewed, provided there have been no material changes. Material changes include (but aren’t limited to):

  • any change (completed or actively contemplated) in the share or loan capital of the company
  • any arm’s length transaction (completed or actively contemplated) involving shares of the company
  • negotiations or preparations for a flotation takeover
  • any declaration of a dividend on any class of shares in the company
  • the publication by the company of any new financial information, for example, the annual accounts or interim results or announcement

SAV contact details

If there have been material changes you should start the process again.

What to expect from SAV

When SAV has all the information it needs, it can usually provide a valuation within 4 weeks of the request. If it has to ask for further information, this can take longer.

If you want to appoint an accountant or professional valuation firm, SAV is happy to deal directly with them. Please make sure the relevant section on the VAL 232 form is signed for and on behalf of the company and that your professional adviser has all the facts, as you will be ultimately responsible for the accuracy of the information supplied to SAV.

If you or your professional advisors wish to arrange a meeting to discuss the valuation, SAV will try to arrange one at a mutually convenient time and place. This may mean the process takes longer than usual.

SAV will always be courteous, fair and professional. If you or your professional advisers raise a question or issue in writing, it aims to respond within 10 working days and, if it can’t, will let you know the reason for the delay and when you can expect a full response.

You can expect SAV to explain any actions it takes, for instance, why:

  • it would like to meet with you
  • it needs to question any explanation you’ve given
  • its valuation differs to yours

Your company, its directors and its shareholders have the right to the same degree of confidentiality that all taxpayers receive. Except in the limited circumstances allowed by law – such as at tribunal hearings – SAV will only give information to people you have authorised.

Complaints

If you think SAV has made a mistake or treated you unfairly, you can ask for the matter to be reviewed by the Assistant Director in charge of the part of SAV where the valuation was carried out.

To find out how to make a complaint, read the Complaints factsheet

If you’re still not happy with the outcome, the factsheet also explains how you can take your complaint further.

Published 4 March 2014