Fiscal Valuations

When transferring assets, particularly shares in unquoted companies, UK tax law requires transactions to take place at market value, often valuing the asset on a theoretical basis in the absence of a buyer.

Establishing what market value is often key in determining what any tax liability is that may arise. As such a valuation exercise for the assets is often critical for tax advice. Tax valuations are considerably different from commercial valuations as they are particularly subjective, with tax case law having significant influence in approach. In addition HMRC have changed their principles to ensure that the commercial reality of the transaction is suitably reflected when valuing an asset.

At Mazars we can provide a number of different services to help your tax needs. Examples of where we can provide fiscal valuations are:

  • Valuing share classes for HMRC recognised management incentive plans such as Enterprise Management Incentives and Company Share Option Plans
  • Valuing shares for unapproved incentive arrangements
  • Capital gains tax valuations
  • Valuations of businesses for inheritance tax
  • Modelling of expected returns to individuals for valuation purposes

At Mazars, we have the necessary specialist skills and experience in the area, to provide either submissions to HMRC for awarding share incentives or provision of valuation reports to substantiate certain tax values as required. Furthermore having a robust valuation can maintain value of transactions on due diligence exercises where other professionals look to use the lack of valuations reports as a “price chip” on transactions.

Having a valuation report can ensure that a company and the individuals concerned, reduce the risks of an unexpected tax liabilities arising on acquisition, disposal or transfer of assets or having uncertain tax valuations on transactions.

Our client base is wide reaching and includes, large corporates, private equity and venture capitalist backed companies to owner manged businesses and family run companies.

Our approach

  • To ensure that we understand what is required for work, we look to meet with clients to ensure that we understand the needs required and the background to the valuation
  • Consideration of all key factors for driving value in the asset class and review applicable methodologies to ensure that the approach taken is acceptable to HMRC if challenged
  • Draft a robust valuation report to mitigate the risk of challenge from HMRC. The report is an audit of the assumptions made for any value adopted for the asset and makes sure