Valuations for tax purposes

HMRC may require formal valuations across a wide range of tax events. These include inheritance tax (IHT) valuations when passing on a business or shares, capital gains tax (CGT) valuations when disposing of business assets, and share scheme valuations for employee options under CSOP, EMI, or SEIS schemes.

Valuations are also expected in corporate restructuring scenarios, intellectual property transfers, and goodwill assessments. In many cases, HMRC does not explicitly demand a valuation, but submitting an independent, well-supported report significantly reduces the risk of challenge or delay.

A valuation should be obtained at the time of the transaction or event, not retrospectively. For example, when gifting shares, selling part of a business, or granting employee options, it is best practice to have an up-to-date valuation in place before executing the action.

Early valuations are also essential when preparing for succession planning, exit strategies, or setting up Employee Ownership Trusts (EOTs). Obtaining a valuation in advance ensures that you can structure the transaction effectively, minimise risk, and stay aligned with HMRC expectations.

An independent valuation provides objective, defensible evidence of market value, reducing the likelihood of a dispute with HMRC. It ensures that your valuation methodology, assumptions, and results are clearly documented and supported by financial data and recognised valuation approaches.

At Kreston Reeves, our valuations for tax purposes are prepared using best-practice methods, tailored to the context of each case, and compliant with HMRC guidelines. This makes your position more robust if ever reviewed or challenged, giving you greater peace of mind.

We typically require recent financial statements, details of shareholdings or equity structure, relevant agreements (such as shareholder agreements or option schemes), and any information relating to recent or comparable transactions.

Additional context—such as your plans for the business, sector trends, and any unique risks or circumstances—also helps us ensure the valuation is accurate. Our team will guide you through exactly what’s needed for a smooth and thorough process.