ITEPA: General Procedural Points
The Inspector’s Responsibility
Where directors or employees acquire unlisted securities by reason of an employment, the Inspector may wish to check the values put forward in the SA return or by the employer.
When asking Shares and Assets Valuation (SAV) to check a valuation, the Employment Related Securities Manual (ERSM) at ERSM220080 states that the Inspector should indicate what elections have been made to disregard restrictions.
The Inspector is also required to:
- State the basis of the charge to tax and indicate the relevant charging section
- Supply a copy of the latest statutory accounts available on file relevant to the transaction
- Specify the holding of securities to be valued
- Specify the rights attaching to the securities and whether the restrictions are to be ignored or not
- Forward any valuation submitted by the taxpayer / company
However, where the Inspector is not in a position to make a submission on the basis of the ERSM Instructions, valuers should be as helpful as possible by reference to the limited information supplied by the Inspector and from our own sources.
Pre - Transaction Rulings
In accordance with Code of Practice 10 and the guidance on the Varney proposals, valuation issues are specifically excluded from pre - transaction rulings.
However, very exceptionally, we may at our discretion, entertain a request for a pre - transaction valuation check when a substantial number of employees is involved. The transaction needs to be transparent, without any complicating tax or valuation issues. You should not get involved in any contention or debate with such valuations. The Team Leader should agree that SAV will consider the request.
|Additional Guidance: SVM150000|