Current Share Valuation Issues and Questions to HMRC

Current Share Valuation Issues and
Questions to HMRC
William Franklin and Stephen Woodhouse
Partners
www.pettfranklin.com
6 November 2014

Introduction
Barry Roland Assistant
Director HMRC Shares
Valuation
©2014 Pett, Franklin & Co. LLP www.pettfranklin.com 1

Question 1
How is the Share Valuation
Department at HMRC
structured?

Question 2
How many cases does Share
Valuation deal with each year
and from where do they arise
e.g. share schemes, ITEPA, IHT,
CGT etc?

Question 3
What operational changes
have Share Valuation made
in the last couple of years or
so and what others are
planned?

Question 4
Growth shares with complicated Articles have
become more popular in recent years and have
required Shares Valuation to allocate substantial
resources to deal with them. How do you
believe practitioners could present valuations
for growth shares better and in a form which
would make it easier for HMRC to review and
agree growth shares valuations?

Question 5
Could you describe HMRC’s
policy regarding the agreement
of EMI valuations after the
awards have been granted and
the relevant time limits?

Question 6
Please explain how the
principles for valuing shares in
an unquoted company might
differ when valuing the shares
for ITEPA or CGT purposes from
IHT purposes.

Question 7
Could you describe
HMRC’s views regarding
the Information
Standard?

Question 8
Do HMRC ever encounter situations where there
are transfers of shares and/or option awards
being made at or about the same time for
different tax purposes e.g. EMI option grants ,
CT deductions, CGT calculations, IHT valuations,
stamp duty where market values are needed for
different purposes. If so is it possible to have
different taxable market values agreed for the
same share at the same time ?

Question 9
Given that the statutory basis of valuation is the same
for ITEPA and CGT purposes is it conceivable that a
valuation accepted for say an ITEPA purpose would not
automatically be acceptable for CGT purposes as well
for exactly the same shareholding at the same time —
and vice versa?
• For example if a share award market value is agreed under a PTVC (or the self-
assessment return process) for ITEPA purposes does it automatically follow that
the same value will apply as the base cost for CGT purposes of those same shares
if or when they are sold?

Question 10
If a valuation has not already been agreed under
the PTVC procedure, and the employee merely
records the award of an employment security in
his tax return giving details of the awards and an
unagreed value, how long does HMRC have to
raise a question with the taxpayer on the value
shown on the return before the valuation is
effectively agreed through the self-assessment
tax return process?

Question 11
The QTS proposed that for
quoted securities the ¼ up basis
should be replaced with the
closing price. What point have
these proposals reached?

Recent Share
Valuation Cases

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Office: 0121 348 7878
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