Tax Valuations

Business and Share Valuations can be needed for tax purposes for a number of reasons. Some of these are explained below:

Gifts of shares or interests in a business

Normally, such transactions are between connected parties, usually family and business partners and their connected parties. Tax law dictates that the donor is taxed on the open market value of the asset given away.

The two parties to the gift have three choices when making the gift:

  1. Estimate the value themselves; or
  2. Have the business or shares professionally valued; or
  3. Have the business or shares professionally valued and ask HM Revenue and Customs to agree the valuation afterwards, called a Post Transaction Valuation Check.

If the asset given away is difficult to value, we do not suggest option 1. All UK tax returns include a box which must be checked if gifts or sales of assets are between connected parties making these transactions a prime candidate for examination by HM Revenue and Customs. If HMRC successfully challenge the values used, then there may be unexpected additional tax to pay and possibly interest and penalties.

Whether an individual chooses options 2 or 3 is up to them. By having a proper valuation report prepared by an independent expert such as Hart Shaw will give you a robust and defendable valuation figure in the event HMRC look at the transaction. 

By seeking a Post Transaction Valuation Check you will have the further comfort that your valuation has been pre-agreed thereby giving you certainty about the amount of tax you will have to pay.

Hart Shaw’s Service

However the need for a taxation valuation has arisen, we can help you produce a valuation which will stand up to scrutiny by HMRC. We know how to deal with their staff quickly and efficiently, allowing the matter to be resolved with minimum fuss so that you can move on.

Contact Steve Vickers on 0114 251 8850 or email him steve.vickers@hartshaw.co.uk to discuss this Valuation Service

For more general information about how we can help you through HMRC tax and VAT investigations and enquiries please visit our Tax Investigation.