Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Securities definition

What does Securities mean? In legal practice, securities are tradable instruments that evidence ownership or debt, typically shares, bonds/debentures, and related instruments (for example, warrants), used in corporate finance and capital markets transactions. The term is used across multiple legal contexts and is often defined by statute. In the UK, under the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (RAO), “securities” denotes a grouping of specified investments (for example, shares, debentures, government and public securities, warrants and certificates representing certain securities), distinct from “contractually based investments” and “other investments.” Separately, UK regulation and EU-derived frameworks use “transferable securities” (a MiFID/Prospectus...

UK employment-related securities valuation for tax: money’s worth and market value, quoted/unquoted, restricted/growth shares, PISCES, minority discounts, HMRC SAV practice, BVCA memoranda and hindsight

Published by a LexisNexis Share Incentives expert

Practice notes

The need to value employee shares

When contemplating offering shares to employees, whether directly and/or via a share plan, employer companies and existing shareholders must reflect on what the shares are worth for several reasons, including:

determining how many shares are needed to meet their objectives (valuing existing shares can indicate a need to sub-divide current shares and/or establish a new class)
assessing the tax that may arise on acquisition and on any later chargeable events (for example, for PAYE purposes and/or to enable an employee and the company to decide whether to make an election in relation to restricted shares), particularly in respect of:
- convertible securities
- restricted securities
- securities with artificially depressed or enhanced market values
- securities acquired for less than market value, and
- securities disposed of for more than market value
providing information to an employee acquiring restricted shares and to the employing company that is considering entering into a section 431 joint tax election
ensuring a consistent methodology and process where the company or an employee benefit trust is operating an...

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Web page updated on 22/05/2026

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