Share valuations are carried out to ascertain the monetary value of stocks and shares in unquoted companies for a variety of different reasons. One often thinks of the common business situations when a valuation of shares in a company would be required. This might be because of the issue of share options to employees or due to a change in business owners where shares are sold or purchased.
There are some less obvious circumstances which also require the value of shareholdings to be determined:
Calculation of the chargeable gain on a gift of shares for Capital Gains Tax (CGT) and/or Inheritance Tax purposes (IHT). This may be a gift to another entity such as a trust or to an individual.
- A valuation of a deceased person’s interests for both probate and IHT purposes.
- Declaration of an individual’s assets on a divorce situation.
- Good management of financial affairs and tax planning.
Establishing a 31 March 1982 valuation for CGT purposes.
- A purchase of own shares by a company, for example on an individual’s retirement.
- Valuation of a trust interest on an exit charge or ten-year anniversary charge for IHT purposes.