At the UMV
There are times when you might wish to allow someone to buy shares in your company for the lowest possible price without them facing a tax liability.
For example if you wish for them to be able to avoid dilution and preserve their shareholding percentage when setting up an employee share scheme.
So long as the shares are issued at the Unrestricted Market Value agreed with HMRC, then no tax liability should be caused so long as the number of shares being bought are a comparable holding to that being valued for EMI.
If the shares are issued below the UMV, then income tax will be due on the difference.
If new shares are issued to an employee or Director they should also fill out an ITEPA s431 election.
Our team, content and app can help you make informed decisions. However, any guidance and support should not be considered as 'legal, tax or financial advice.'