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Share valuation


Produced by Tolley in association with
Employment Tax
Guidance

Share valuation


Produced by Tolley in association with
Employment Tax
Guidance
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This guidance note provides an overview of the valuation of shares in the context of employee reward.

It is strongly recommended that anybody wishing to obtain a formal valuation should get advice from an experienced practitioner.

Open market value

In order to determine the value of a company’s shares in connection with a transaction involving employees, it is usually necessary to determine the price that a willing buyer would pay a willing seller, assuming that both of them have full knowledge of all information that is publicly available at the time of the sale.

One factor that must be taken into account is the size of shareholding. It is generally recognised and understood that where somebody has a very small uninfluential shareholding that this is worth considerably less per share than a controlling shareholding.

As an example, while some shares that form part of a 100% shareholding will clearly be worth the appropriate percentage of the whole value of the company, if an employee is offered 0.01% of the company’s shares, they will not have any significant

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  • 16 May 2024 11:50

Home/ Tolley Tax Guidance/ Employment Tax / Providing share awards to employees

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