Selling shares

[andyc2000]

If YourCo's Income (Sales) are reliant on you as the fee generator ie your contract value, then the simple value of your company is the Net Asset Value, less any Goodwill, plus the value of your Director's Loan account (if it is in credit).

If YourCo has an income stream independent of your contracts, then any Accountant will be able to value it, with different values depending on the Dividend Yield, Dividend Policy, EPS, NAV and a whole string of variables, not least, by comparison to Companies similar to yours in the same sector.

This is more like it. Net asset value = £1200 (ish). No other income stream - just contract work.

[TheCyclingProgrammer]

FWIW, the specialist that valued my company took the average of my last three years net profit after tax, adjusted for director's remuneration and multiplied it by 5. The value of the transferred shares (25% in my case) was then (0.25 * company valuation) * 0.7 (discount due to minority holding).

This resulted in a total gain just within my CGT allowance and therefore did not need to be reported on my self-assessment.

[andyc2000]

FWIW, the specialist that valued my company took the average of my last three years net profit after tax, adjusted for director's remuneration and multiplied it by 5. The value of the transferred shares (25% in my case) was then (0.25 * company valuation) * 0.7 (discount due to minority holding).

This resulted in a total gain just within my CGT allowance and therefore did not need to be reported on my self-assessment.

Are you able PM me the details of your specialist? I'm getting the feeling not many people do this after a few years of running the company.

Thanks

[Craig at Nixon Williams]

It is extremely difficult to put a value on a private company as the shares are not traded on an exchange. The value of the company may not be as simple as net asset value or the nominal value of the shares – to highlight the difficulty in determining a value for the company consider how much you would pay for shares listed on a stock exchange to get dividend income of £30k+ per annum. If the yield on the share was say 4% then you would need to have £750k of shares to get dividends of £30k. However in your case the company would generate no dividends at all if it wasn’t for your involvement in the company.

Craig