If you leave me now ...

How should the shares of an employee leaving the company be valued? JAN ELLIS discusses this complicated issue.

IT IS ALMOST two-and-a-half years since FA 2003 Sch 22 was launched on to unsuspecting practitioners in which time much has been written about the new régime for taxing employee shares but relatively little on the valuation aspects of the current régime. This article seeks to build on 'A little uncertainty' by Mick Ruse Taxation 2 December 2004 page 240 and 'Elections and restrictions' by Ken Moody Taxation 1 September 2005 page 607 by looking at the position where employees who are leaving a company sell their shares.
HMRC's frequently asked questions (as were available on the HMRC website on 13 July 2005) which touch on valuation matters provide my starting point specifically those on Chapter 1 questions 1(k) ...