ERSM220110 - Valuation Issues

Valuation not agreed

Sometimes it may not be possible to reach agreement on securities values, because either:

• the company or the employee will not accept that an Income Tax liability arises in principle
• the parties to the transaction have not provided information, or
• the gap between the two opinions of the value is too wide to be bridged and the negotiations have reached deadlock.

In the case of deadlock, it will be necessary for formal action to be taken under the Section 9A enquiry procedures to resolve the matter. If the customer appeals against the decision on the closure of the enquiry the appeal is to be sent to HMRC. The matter may be resolved by agreement under TMA s 54. IfIn the case of deadlock, the matter will be referred for Review in the normal manner. The Reviewing Officer will ask Shares and Assets Valuation to confirm that the valuation advice previously provided has not changed.

In the circumstances where the original advice has not changed and agreement cannot be reached, it may be necessary for formal action to be taken under the Section 9A enquiry procedures to resolve the matter. Normal negotiations seem unlikely to resolve the matter HMRC may offer, or the taxpayer require, an internal review of the case, or the taxpayer might wish to send their appeal to the tribunal. If the taxpayer opts for review, the Reviewing Officer will consider the appealed decision, and may ask Shares and Assets Valuation to confirm that the valuation advice previously provided has not changed. See the Appeals, Reviews and Tribunals Guidance (ARTG) for a full explanation of the appeal and review process. The review conclusion will be treated as an agreement for settlement of the appeal unless the customer sends their appeal to the tribunal.

If the customer sends their appeal to the tribunal normal preparations for tribunal hearing will then continue.