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HMRC internal manual

Shares and Assets Valuation Manual

From
HM Revenue & Customs
Updated
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ITEPA: Memorandum of Understanding

A Memorandum of Understanding (MOU) between the British Venture Capital Association (BVCA) on the income tax treatment of managers’ equity investments in venture capital and private equity backed companies was agreed between the Inland Revenue and the BVCA on 25 July 2003. The MOU sets out the approach accepted by HMRC and the BVCA in determining whether the price paid by ‘managers’ represent

  1. The initial unrestricted market value where the shares acquired are restricted securities
  2. The market value where the shares are not restricted.

The MOU is self - explanatory and the text can be found in the Employment Related Securities Manual (ERSM) at ERSM30520.

A separate MOU was agreed on 25 July 2003 in respect of the income tax treatment of venture capital and private equity limited partnerships and carried interest. The text of the MOU is at ERSM30530.

  Additional Guidance: SVM150000