Taxman is taking an unfair share of company shares
21/02/2008

Smaller businesses are losing out financially because HM Revenue & Customs (HMRC) is overstating the valuation of their shares for tax purposes, claims a specialist adviser.

Alan McCann, tax director at business advisers DTE, believes many businesses lack access to the specialist knowledge needed to evaluate their shares, leaving them the mercy of HMRC.

Share valuations are typically needed in situations including the death of a shareholder, gifts or sales of shares, share option schemes, and tax planning or forecasting.

"Estimating and agreeing these valuations with HMRC causes problems for many SMEs and smaller professional practices who have not had the opportunity to build up any expertise in such matters," said Alan McCann.

"HMRC's Shares Valuation Division usually has a great advantage in these circumstances and many share valuations are accepted which are unfair to the taxpayer."

Alan McCann is advising SMEs and smaller professional practitioners to seek specialist tax advice before agreeing share valuations with HMRC.