What are AMV and UMV?

A brief explanation of Actual Market Value (AMV), and Unrestricted Market Value (UMV)

These are two abbreviations that you will see crop up all the time when talking about EMI, especially at the valuation stage.

Calculating them is a little more complicated, but what they are is fairly simple:

  • Unrestricted Market Value (UMV) values all the shares as if they had no restrictions and could easily be bought and sold at the prevailing worth of the company at the time. This figure is used to calculate the maximum number of options to be granted by the company (£3m) to an individual (£250,000 within a three-year period).
  • Actual Market Value (AMV) will not be higher than the UMV but may be significantly lower. Typically, this is because the shares offered via EMI will make up a small proportion of the company's total equity and aren't as liquid as ordinary shares (there are often conditions attached to EMI options, and once the options are exercised the shares may not be readily saleable).
    The AMV is used to set the income tax point for the shares when they are exercised.

You can request an HMRC-approved valuation for your EMI scheme directly through Vestd. Log in to your account and go to Valuations > New Valuation... and select Start a new valuation. 

We'll then ask you some questions about your business and its finances to form our valuation.  

You can also request an exercise valuation via the same method. An exercise valuation is needed to determine the AMV at the time of exercise, which lets the option holder know their tax liabilities on the exercise and sale of their shares. 

 

And the best part, valuations are often included in your Vestd plan.* 

 

*See our pricing page for more information on what's included in our plans. 

 

Our team, content and app can help you make informed decisions. However, any guidance and support should not be considered as 'legal or financial advice.'