Selling shares, giving them to family, or setting up staff share options all lead to the same question: what are those shares worth? When a company isn’t on the stock market, there’s no easy price to check. That’s where HMRC’s own valuation team steps in.
According to HMRC, once they have everything they need, they aim to agree a value within four weeks. Sounds simple, but the value they land on can change how much tax you pay, sometimes by a lot.
Get it right, and things move smoothly. Get it wrong, and you could end up with a bigger bill or a longer wait.
A HMRC share valuation is when HMRC works out what shares in a private company are worth. This matters because private companies do not sell shares on the stock market like large companies do. There is no daily price you can check online. So when tax depends on the value of those shares, someone has to work it out by hand.
The team that does this job is called Shares and Assets Valuation, or SAV. They look at a company’s accounts, its recent history, and any deals involving similar shares. Then they use that information to reach a fair number.
This number is not just a guess. It becomes the figure used to work out tax. That could be Capital Gains Tax when shares are sold, Income Tax when shares are given as part of a job reward, or tax on a company passed down to family.
Getting this value right matters a lot. If it is too low, HMRC may open a check later, and that can lead to extra tax and stress. If it is too high, you may end up paying more than you should. That is why many business owners and investors ask for expert help before sending anything to HMRC.
At ETC Tax, our Private Client Tax team and our Corporate and Business Tax team both work with clients who need a HMRC share valuation done properly, whether it is for a personal tax matter or a company one. You can read more about how SAV works directly on GOV.UK.
Not every company owner needs a HMRC share valuation. It usually comes up at specific moments, when something changes hands or something is set up for the first time. Here are the most common times it happens.
You might need one when you:
Each of these situations leads to a different form and a slightly different process, but they all end up with the same HMRC team checking the numbers.
Timing matters here too. If you wait until after you have already filed a tax return to think about the valuation, you have less room to fix mistakes. Getting it sorted early, before a sale completes or before options are granted, gives everyone more certainty and fewer surprises later.
If your situation involves handing shares to staff, our Employee Share Schemes team can walk you through what HMRC will expect. And if you are planning to sell part or all of your company, our Buying or Selling a Company service covers the tax side of that too. For a general overview of how shares are taxed when passed on or sold, GOV.UK has a helpful starting page.
The path you take depends on why you need the valuation. There are two main routes, and it helps to know which one applies to you before you start any paperwork.
If you have already sold or given away shares and want to check the value you used, you ask for something called a Post Transaction Valuation Check. This is done after the sale has happened.
If you are setting up a scheme where staff will be given the chance to buy shares, you apply for a valuation before anything is granted. This route is used to agree the price ahead of time, so everyone knows where they stand from day one.
Both routes end the same way. SAV looks at your figures and either agrees with them or asks follow-up questions. If they ask questions, it simply means they need more detail before they can sign off. This is normal and does not mean something has gone wrong.
Because the process and paperwork are different for each route, it is easy to send the wrong form or miss a step. Our Tax Consultancy Services team helps clients pick the right route from the start, and our Tax Disputes and Investigations team steps in if HMRC raises questions along the way. Full details of both routes are set out on GOV.UK.
If you have sold shares in a private company and want to make sure the value you used is correct, you can fill in a form called CG34. This is called a Post Transaction Valuation Check, and it is a way of getting HMRC to confirm your number before any problems come up.
This service is mainly for two types of people. Individuals who need to work out Capital Gains Tax on a sale, and companies that need to work out Corporation Tax on a disposal. Once you send the form, along with your reasoning and any supporting paperwork, SAV reviews it.
According to HMRC’s own guidance, once they have everything they need, they aim to agree a value within four weeks. That said, if they need to come back and ask you more questions, it can take longer. Sending a complete and clear submission the first time gives you the best chance of a quick answer.
This step is optional, but many people choose to do it anyway. It gives peace of mind that the figure on your tax return will not be challenged months or years down the line.
Our Private Client Tax team helps individuals prepare CG34 submissions, and our Corporate and Business Tax team supports companies through the same process. You can read the official guidance on the CG34 process on GOV.UK.
If your company wants to offer staff the chance to buy shares through a scheme called Enterprise Management Incentives, or EMI, you need a different form. This one is called VAL231, and it works before anything is granted rather than after.
The rule behind this is simple. The price staff pay for their shares must be set at or above the fair market value on the day the offer is made. If the price is set too low, the scheme loses its tax benefits, and staff could end up paying more Income Tax than expected.
Once SAV has your figures, they either accept the value straight away or come back with questions first. Once agreed, that value usually only holds for a set window of time, so the company needs to grant the shares within that window rather than waiting too long.
There has been a big change here recently too. From April 2026, more companies became able to use EMI in the first place. The size limit for company assets rose from £30 million to £120 million, and the staff limit rose from 250 to 500 people. This means many growing businesses that could not use EMI before now can.
Our Employee Share Schemes team helps companies through the VAL231 process from start to finish, and our EIS and SEIS team can advise if your company is also raising investment at the same time. HMRC sets out the EMI valuation rules in full on GOV.UK.
SAV does not simply pick a number out of thin air. They look closely at real information about your company before they reach a figure.
The main things they check are:
If an outside investor recently bought shares at a certain price, SAV often treats that price as a useful starting point. From there, they adjust the number up or down depending on whether the shares being valued carry the same rights as the investor’s shares.
For example, shares with fewer voting rights or weaker protection than an investor’s shares are usually valued lower. Shares that carry the same rights as a recent buyer tend to be valued closer to that recent price.
This is why company structure matters so much. If your company has different classes of shares with different rights, getting the valuation right takes real care, not guesswork.
Our Buying or Selling a Company team regularly works through this kind of detail with clients, and our Reorganisations and Reconstructions team can help if your share structure needs untangling first. HMRC explains its full approach in the Shares and Assets Valuation Manual on GOV.UK.
There is no single fixed timeline for a HMRC share valuation. How long it takes depends on which route you are using and how complete your submission is when you send it.
For a straightforward Post Transaction Valuation Check, HMRC aims to agree a value within four weeks of having everything they need. That is a reasonable target for simple cases with clear paperwork. But if your company has an unusual share structure, or if information is missing, it can take a good deal longer.
The same pattern applies to EMI valuations. Simple, well prepared submissions tend to move quickly. Anything that raises questions or needs more back and forth naturally takes more time.
The best way to avoid delays is to plan ahead. Do not wait until the week before a sale or a share grant to start the valuation process. Building in extra time gives room for HMRC to ask questions without putting your deadline at risk.
Our Tax Consultancy Services team helps clients prepare complete submissions the first time, which cuts down on delays. If you want to talk through your timeline before you start, you can contact us directly. HMRC’s own guidance on expected timeframes is available on GOV.UK.
Sometimes SAV reaches a number that does not seem right to you. The good news is that you are not stuck with it. There is a proper process for raising a concern.
If you think HMRC has made a mistake, or that you have been treated unfairly, you can ask for the case to be looked at again by the Assistant Director in charge of that part of SAV. This is a formal review, not just a phone call, so it helps to explain clearly why you believe the figure is wrong.
If that review does not resolve things, there are further steps you can take to make a complaint about HMRC. These steps are there to make sure taxpayers have a fair chance to be heard, not just accept whatever number comes back.
Having someone experienced involved early on makes a real difference here. A professional who understands how SAV reaches its figures can challenge a valuation with clear, specific reasons, rather than just a feeling that the number seems too high.
Our Tax Disputes and Investigations team supports clients through exactly this kind of challenge. If you are dealing with a valuation you disagree with, get in touch with us to talk through your options. The full review and complaints process is explained on GOV.UK.
Working out what your shares are worth is not something you want to guess at. One wrong number can mean a bigger tax bill, or HMRC coming back with questions later. That is why it pays to get it right the first time.
ETC Tax helps business owners and shareholders across the UK sort out their HMRC share valuation, whether you are selling shares, setting up a staff share scheme, or raising investment through EIS or SEIS.
If you’re looking to understand how business valuations work beyond HMRC share valuations, take a look at our Business Valuation guide. You’ll also find case studies that show how we’ve helped clients handle real tax situations and valuation challenges
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