There are many reasons why it may be necessary to value a business, or shares in a company conducting a business. There may be commercial reasons for the valuation, or family reasons such as divorce, or tax reasons such as on the making of a gift. There may be Inheritance Tax reasons, including death (with the business interest falling into an estate) or a ten year anniversary charge within a trust. It may be necessary to agree a valuation of shares with HMRC for the purposes of issuing employee shares. All of these situations, and many more, may require a valuation to be performed. In most cases involving valuations relevant to a tax situation, it will then be necessary to negotiate and agree the valuation with HMRC.
We have a number of Partners and Directors who are experienced in valuation work. They are members of the Valuation Special Interests Group of the Institute of Chartered Accountants in England and Wales, and they draw upon many years of in-depth experience, including work as Independent Experts for court proceedings.
Whilst there are several recognised valuation methodologies for businesses in different sectors, the correct approach is likely also to be influenced by the size of the shareholding or business interest. Valuing a business is not a precise science and it is necessary to consider each situation with an open mind in order to identify the relevant factors. With a commercial valuation, our experts will work closely with management to fully understand how the business operates, identifying the issues which influence income streams and capital growth. With tax valuations, it is often necessary to consider generally available financial data and consider quoted company comparators operating in the same sectors.
Whatever the reason for the valuation, we recognise that the process can be a sensitive issue. We bring a commercial and cost-effective approach to these assignments, quickly considering our clients’ key issues and the appropriate valuation methodologies to apply in order to arrive at an independent valuation. Where the valuation is driven by tax, we will stand behind our conclusions and negotiate hard with HMRC in our clients’ interests.