Although the Substantial Shareholding Exemption (“SSE”) has reduced the need for valuations on corporate disposals made by trading companies and groups, there are still a number of situations where market value must be determined for corporation tax purposes.
Our corporate tax clients involve us where open market value impacts upon chargeable gains or losses or in connection with the impairment of goodwill. A typical situation is the disposal of a subsidiary company, sub-group or an underlying business where the SSE does not apply. In this situation, the market value of the asset rather than its actual acquisition cost determines the base cost for chargeable gains purposes. A valuation may also be necessary where HMRC invokes the value shifting or depreciatory transaction provisions in relation to intra-group transfers.
We can assist corporate tax departments in these circumstances with the following:
- pre-disposal valuation advice
- quantifying exposures for corporate tax planning
- obtaining a Post Transaction Valuation Check from HMRC
- advising on or handling negotiations with SAV
In many cases, pre-disposal valuation advice can assist the corporate tax planning process. Our extensive experience of negotiating values with SAV for UK and overseas incorporated businesses makes us well-equipped to give reliable advice on probable valuation outcomes.
HOW WE HELP
Need to settle a dispute over the value of a shareholding?
How much is your company worth?
Selling a minority shareholding. What is it worth?
Incorporating your sole trader business? What is the goodwill worth and what value will HMRC accept for tax purposes?
Making awards under a Management Incentive Plan? What is the value of the MIP shares for tax purposes?
Negotiations with HMRC at an impasse? Need a new perspective?
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Possibly one of the most neglected and common areas of Pay As You Earn (“PAYE”) failure is where shares are sold by employees or ex-employees – disposals of employment-related shares.
Where not all conditions of the MoU are satisfied – is it possible to put some reliance on the principles of the MoU? If the ‘spirit’ of the MoU is satisfied, can management rely on it?
Following the introduction of the employment-related securities legislation in the Finance Act 2003, there was significant uncertainty in relation to the tax implications for management acquiring shares in venture capital (“VC”) and private equity (“PE”) backed companies.