Information Standards

There are complex rules governing the availability of information to the valuation of minority shareholdings. It is important to get them right because the dataset will drive the valuation and therefore the amount of tax payable. The Information Standards are explored in case law and depend on several factors including, but not limited to, number of votes attaching to each block of shares, the likely value of each block and the quality of the published information.

Discounts

The term ‘discount’ is commonly used to describe two relationships in the context of private company share valuation and it is crucial to understand which of the two is in point:

• The reduction made to quoted and other comparator multiples used to arrive at a value: comparator multiples are often adjusted to reflect differences between comparator companies and the subject company including, amongst many others, size, diversity, number of votes and marketability; or
• The relationship between the value per share of a private company and the value per share of a shareholding in that company: a discount is often reflected in the valuation of minority shareholdings to reflect a lack of marketability and control. Estimating an appropriate discount is a complex matter. There is a wide body of case law exploring the application of such discounts and several empirical and mathematical approaches have been developed to quantify them. Many other fact pattern specific factors will also affect the quantum of any discount.

Valuations

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Definitions of value

Corporate & intangibles valuations

1. Analysing the reorganisation
2. Asset identification
3. Context and setting
4. Valuation methodologies
5. Valuations

Management incentives

Capital taxes

HMRC negotiations

Purchase Price Allocator

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