While every attempt will be made to ensure that information provided is accurate at the time of publication, it should be treated as guidance only and does not constitute legal or professional advice. Tax law and guidance changes frequently and readers are advised to consult the current relevant publication  for the most up-to-date information on this topic.

Q: My client is in discussions with a senior employee who is leaving the company. He has a 10% stake in the business, and the company will buy the shares back in accordance with the articles, which state that the fair value of the shares is calculated without reference to a minority discount. As a minority discount would usually be applied for tax purposes, is the employee receiving an overvalue for the shares, and does the company need to withhold PAYE on the 'excess' amount?

The answer to this question was provided by Diane Elliott, Share and business valuations director, BDO

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