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HMRC internal manual

Shares and Assets Valuation Manual

HM Revenue & Customs
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ITEPA: Employee Shareholder Employment Status (ES)

This is a new employment status, taking effect from 1 September 2013.

Full details of the status are to be found in the Growth and Infrastructure Act 2013 (Chapter 27, s31).

An employee or prospective employee of a company who agrees to be an employee shareholder must receive fully paid up shares in the company or in its parent undertaking, with a value of at least £2,000 to meet the qualifying conditions for the new status. If the shares are worth less than £50,000 at the time of the award, they will be exempt from Capital Gains Tax at the time of disposal. If the shares are worth more than £50,000 at the time of the award, the new employment status will still apply but exemption from CGT will only apply to the first £50,000 of shares.

For the purposes of the £2,000 test, the value will be the actual market value (AMV) of the shares, taking into account any restrictions but the value of the shares for the purposes of the £50,000 upper limit will be the unrestricted market value (UMV), without taking into account restrictions.

A form VAL 232 is available to enable applicants to apply for a valuation check. We will consider a check before the award of the shares. The form VAL 232 requires the applicant to indicate the proposed share value where there are restrictions and so on - the actual market value (AMV) - and to state the proposed share value without taking any such restrictions into account - the UMV.

  Additional Guidance: SVM150000