Share and Business valuations – 5 reasons you might need one

  1. To prepare for sale/purchase negotiations
    Having a firm idea of how much a business is worth in advance of commencement of negotiations can give you a strong hand in ensuring you obtain the deal you are looking for. Business owners sometimes have an unrealistic view of how much their business is worth, so it can be a useful tool to help bring the seller and purchaser close enough to bridge the gap to a successful outcome. It can also stop you from giving away your perhaps most prized asset too cheaply.
  2. To support a tax advantaged employee share scheme
    Company share schemes are an excellent way of rewarding employees, promoting loyalty, and retaining key skills. To obtain access to the tax advantages it is, in some cases desirable and others necessary, to agree a share valuation with HMRC in advance of issuing the relevant shares or share options.
  3. To facilitate the exit of a retiring shareholder or partner
    Whether it be on amicable terms or under a black cloud, an exiting shareholder or partner is going to want to obtain fair value for their share in the business that they are giving up. The ongoing owners will undoubtedly have a different view of the value of the share in question. Shareholders or partnership agreements usually cater for such situations, but they often call on the services of a professional valuations expert to resolve disputes. In the absence of these agreements an independent valuation can be essential.
  4. To support a capital gains tax or inheritance tax calculation
    HMRC have the power to substitute market value for the actual consideration placed on a transaction in a multitude of different situations. Valuations often have to be negotiated in these situations between the taxpayer’s adviser and the District Valuer. There is also a requirement to value an individual’s entire estate for probate and inheritance tax purposes on death. If there are shares in a private company or unincorporated business interests within the estate then a business valuation will be required.
  5. To advise within divorce proceedings
    The Courts will seek to divide the assets of a divorcing couple on what they consider to be a fair and reasonable basis. In order to achieve that they need to understand the value of all of the assets held by both parties. If business interests are involved then a valuation will be required.

Through years of experience working in this niche area, Dafferns are able to provide a valuation service, not just to our client base, but also to the wider business community. To discuss how we can help you please contact Brian Jukes