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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13997
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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Hello I have a company with has 3 shares of nominal value

Customer Question

Hello

I have a company with has 3 shares of nominal value of 22,150, 1,300 and 250 which make up 94.8 per cent of the share capital. How do I work out what they are worth now ?
Submitted: 3 years ago.
Category: Tax
Expert:  Sam replied 3 years ago.
Hi


Thanks for your question, I am Sam and one of the UK tax experts here on Just Answer.

In a private limited company such as this, you will only ever be able to estimate the shares worth by looking at the current profits, and revenue held within the company, less any property assets held - as a general guideline - which in essence is what you would expect to sell the company for -
Then you would apply this to the ratio of shares held to each of the 3 shareholders.

But you can always consider providing this information to a local accountant they will be able to work this out for you.

Thanks

Sam


Customer: replied 3 years ago.

So basically its assets less my liabilities then divided by 3 in this case multiplied by percentage ?

Expert:  Sam replied 3 years ago.
I

No - it would be profits on hand (from previous years and having been taxed but still in the company) plus the last full years profits, less any business assets.

Thanks

Sam
Customer: replied 3 years ago.

Hello


 


So by property/business assets you mean all assets ? or just long term?

Expert:  Sam replied 3 years ago.
Hi

Business assets relate to business equipment or property etc - so yes something that has a long term use in the business or owned by the business. However usually its when property is involved, or expensive business machinery, as the values of these can then provide an over inflated value of the approx. shares worth

Thanks

Sam
Customer: replied 3 years ago.

hello


 


So if I had a property of 12 million but profits in total of 500,000...my shares would basically be worth nothing correct ?


 


thank you

Expert:  Sam replied 3 years ago.
Hi

Thanks for your response

You stated that the shares were worth 22,150, 1,300 and 250 so they have grown in value as your company would be worth £500,000 which would mean the shares were worth £23,700 in total originally which would be break down to approx. 465,000 27,000 and 5000 for the three shareholders (but remember this does not equate to market value - this is for private use only)

Thanks

Sam


Thank
Customer: replied 3 years ago.

Sorry, Im being a bit think today, how did you work out those splits?


 

Expert:  Sam replied 3 years ago.
Hi

By working out the ratio of percentage relating to the original value, and then applying it to the profits figure of £500,000

Thanks

Sam
Customer: replied 3 years ago.

Im not getting your figures, can you give me an example on one please

Expert:  Sam replied 3 years ago.
Hi

Total original value £23700

So share holder 22150/23700 = 0.93
Total current value £500,000 x 0.93 = £465,000
and so on

Hope that helps

Thanks

Sam
Customer: replied 3 years ago.

Yes get it...thank you

Expert:  Sam replied 3 years ago.
Wonderful!

Thanks

Sam
Expert:  Sam replied 3 years ago.
Hi

I hope you were satisfied with the information provided, let me know if I can be of any further assistance.

Thanks

Sam