How to value shares in a startup for S431 election

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Hi, we have recently started a company with one UK based employee who we will be providing a share grant to (in exchange for par value or less than one penny per share). We are developing a software product but are pre-commercialization (no revenue.) We want to make a section 431 election for our UK based employee but have not been able to find any example valuations we could base ours on in case there was ever an inquiry by HMRC. I understand the nuances of AMV versus UMV (the share grants will come with restrictions) but I am genuinely unsure how to come up with a 'fair' valuation for a company that is pre-revenue and whose only asset is some incomplete software and cash in the bank account. Any advice?

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By Ruddles
24th Jan 2024 12:05

I would advise you to seek out a professional. An accountant would be a good start. Too much missing information to enable anything more meaningful.

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