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Sweat Equity

Sweat Equity

Hiya, I am wondered if anybody has worked with pre trading/start up sweat equity. I have been asked to convert product development and research costs to sweat equity shares. The product has not yet on the open market so no trading as yet. Can anybody advise the correct accounting treatment for this and tax implications. I cat find any guidance on HMRC website an very little at all on the web (certainly not in UK).


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26th Feb 2016 19:27

Who is perspiring?
If it is contractors or other suppliers then DR creditors, Cr share cap & share premium. How much if the business they receive in return is a matter for the existing business owner.

If it's employees then look at employee share ownership schemes and remember NMW

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