Share Scheme Manual - SSM7.31

Valuations to be provided for SA purposes

In many cases, employees will need to know the market value of shares in order to calcuate their tax liability, and complete their SA return. For listed companies this information can easily be obtained from published sources such as newspapers. However for unlisted companies information is not so readily available and employees will often look to their employing companies for help.

To assist companies in this position Shares Valuation Division are able to provide a limited amount of help in certain specific circumstances. Where:

• options have been exercised over shares in an unlisted company, and

• income tax liability arises on exercise under ICTA88/S135, and

• appropriate authority has been given by employees to the company, then

Shares Valuation Division is prepared to negotiate the valuations on exercise directly with the company. Negotiation can begin as soon as exercise has taken place and there is no need to wait until the end of the tax year.

Shares Valuation Division is not able to negotiate a value for the shares before the exercise of options takes place. If a company asks for such a valuation, the papers should not be forwarded to SVD, but should be returned pointing out that negotiations cannot take place before the transaction giving rise to tax liability.