Valuation of Shares Under the Employee Shareholder Status

The employee shareholder status came into effect on 1 September 2013.  For those employers contemplating this new status for their employees or future employees, HMRC has recently updated its Shares and Assets Valuation Manual.

Employers will be able to issue employees with a minimum of £2,000 worth of shares in a company in exchange for the employee giving up certain employment rights. The first £2,000 will be exempt from income tax and on the disposal of the shares the employee will get an exemption from capital gains tax up to the first £50,000 realised.

For the purposes of valuation, HMRC has stated that the valuation for the shares to be allotted will be at the actual market value of the shares, taking into account any restrictions in respect of those shares. However, for the capital gains tax exemption, the £50,000 valuation will be calculated at the unrestricted market value, without taking into account any restrictions attached to those shares.

Employers will be able to get a valuation check from HMRC for the shares to be issued under the employee shareholder status by submitting a form VAL 232 to HMRC.


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Bulletins are for general guidance only. Legal advice should be sought before taking action in relation to specific matters. Where reference is made to Court decisions facts referred to are those reported as found by the Court. Please note that past bulletins included in the Archive have not been updated by any subsequent changes in statute or case law.