Shares and Assets Valuation

Enterprise Management Incentives and Share Incentive Plans

Contents

How to ask us to agree a valuation

If you are operating a SIP there are a number of occasions when you need to agree the market value of the shares with us. To agree a market value with us, you will need to propose a value for the shares and provide background information to support your proposal.

If you have granted, or are about to grant an EMI option there are a number of occasions when you will need to know the value, and you may ask us to agree a value with you. If the shares under option carry restrictions that affect their market value, you will need to know both the unrestricted market value (UMV) and the actual market value (AMV).

Please use the following forms to ask for a valuation to be agreed:

Each form sets out the information you should give to support your proposed valuation. The forms should be sent to SAV. You can get more forms from us if you need them.

If you do not use a form or do not supply all the information it requests, we may need to ask you to supply the missing information before a valuation can begin. This could delay the agreement of the valuation. When we receive your completed form Val 230 or Val 231 (PDF 45K), we will tell you within 10 working days what further information we need, if any.

Asking us to agree a valuation is not the same as:

  • notifying HMRC of the grant of EMI options
  • requesting approval for a SIP
  • making the annual return required for a SIP or EMI.

You will need to contact separately HMRC's Small Company Enterprise Centre (for EMI) or the Employee Shares and Securities Unit (for SIP) to fulfil these requirements.

If you want further information on either of the plans, keep checking the Shareschemes area, which will be regularly updated, or phone 020 7147 2853.

Professional representation

You can choose to be professionally represented, for example by an accountant or expert valuation firm. We will deal with any professional adviser you appoint unless you ask us not to do so. If you appoint a professional adviser to deal with the valuation, you should ensure that the relevant section of Form Val 230 (PDF 74K) or Val 231 (PDF 45K) is signed for and on behalf of the Company.

You should make sure that your professional adviser has all the facts, as you will always be ultimately responsible for the accuracy of all the information supplied to us.

Providing Information

Forms Val 230 (PDF 74K) and Val 231 (PDF 45K) are designed to help you to provide the essential information needed to value the shares.

If SAV needs to ask further questions or to get more information from you we shall do so within 10 days of receiving the form. We will explain our request as fully, clearly and simply as possible.

We will only ask for information we consider is relevant to the valuation in question. If you think it is not relevant, please tell us why straight away. We will consider your reasons carefully and if we think we still need the information we will explain why we need it. You should also tell us if you have any difficulty obtaining information that we have asked for.

We will try to include all the information we need in one request rather than ask for it piecemeal. However this will not always be possible. It may help if you tell us anything you think may be relevant to the questions we have asked or to the valuation as a whole. For example, any special features of the business or financial affairs of the Company, or its directors or shareholders may be relevant. If you reply promptly when we ask for information it will save time and help keep down costs for the Company and us. Otherwise, it may take longer to reach an agreement.

Meetings

If you or your professional advisers ask for a meeting to discuss the valuation, we will try to arrange one at the first mutually convenient opportunity and location. However, it may not always be possible to hold a meeting within a normal response time. Arranging meetings might extend the overall time taken to agree a valuation.

Duration of agreed values for SIPs

Once we have agreed a value at a particular date for SIP purposes, we may be willing to agree that it applies for a defined period. This does not apply to EMI.

The defined period is until the earlier of

  • six months from the first Valuation Date, and
  • the first occurrence of any significant event likely to impact on the shares' valuation.

A significant event for these purposes includes, but is not limited to:-

any change (completed or actively contemplated) in the share or loan capital of the Company; 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 other announcement;

any arms length transactions (completed or actively contemplated) in shares of the Company; negotiations or preparations for a flotation or take-over.

If an occasion for valuation arises within an agreed defined period, you do not need to apply to us to agree a value unless a significant event has occurred or is likely to occur. However, if you wish to you can contact us at any time during a defined period to:

  • confirm the market value

or

  • end the defined period (whether or not there has been a significant event).

At the end of the defined period you may apply to extend it if you wish. We will ask for written confirmation that no significant events have occurred since you agreed the value with us or are likely to occur in the period for which you are asking for the extension. If the defined period is extended, the value agreed will continue to apply until the expiry of the extended period or sooner if a significant event occurs (as described above).

You should inform us of any significant events arising in a defined period as soon as the next occasion for a valuation occurs. If a significant event does occur, you will need to re-apply to us to agree the value of the shares for the purposes of the SIP.

You should note that these arrangements apply only for the purpose of valuations required in respect of shares that are subject to SIPs.

During the negotiation of a valuation

We will always be courteous, fair and professional.

If you or your professional adviser write to us we will aim to respond within 10 working days to every issue or question that you have raised. If we cannot reply within this time, for instance because of the amount or complexity of the material you have sent us, we will let you know the reason for the delay and say when you can expect a full reply.

Keeping you informed

We will explain the reasons for any actions we take while negotiating a valuation. We will tell you, for example, why we:

  • think we need a meeting with you
  • need to question any explanation you have given, or
  • propose an alternative to the valuation you have suggested.

Confidentiality

The Company, its directors and its shareholders have the right to the same high degree of confidentiality that all taxpayers receive.

Except in the limited circumstances allowed by law (such as at Appeal Commissioners' hearings) we will only give information to people you have authorised.

The costs to you

We know that dealing with our questions may cost you time and money. So we will only ask for information we reasonably require to agree a valuation.

The time we take

We will negotiate to reach an agreed value as soon as possible. We will aim to do this within four weeks of receiving the information requested on form Val 230 (PDF 774K) or Val 231 (PDF 45K), or of receiving any further information we require.

Complaints

Our factsheet C/FS1 (PDF 264K) explains how we deal with complaints if you think we have made a mistake in dealing with your affairs. If you believe:

  • we have not followed our Service Statement
  • we have denied the Company its rights in some respect
  • we have made a mistake, or
  • we have treated you badly in some way during the negotiation.

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.

If you are still not satisfied you can ask the SAV's Customer Service Manager to examine your complaint. Our factsheet C/FS1 (PDF 264K) tells you how to do that. The leaflet is also available from any HMRC Enquiry Centre or HMRC office.