The Company Shares account type allows you to model shares that a client owns directly in a company without needing to model the underlying business itself.
This can be particularly useful when a client owns shares in a privately held or closely held company and your planning focus is the value of the client's shares, dividends received, and future sale or transfer of those shares, rather than the company's underlying assets, expenses, or operations.
Training Tip: A simple way to decide which model to use is:
Own the business → Company
Own shares of the business → Company Shares
Example
Suppose your client owns 25,000 shares of a privately held company currently valued at $8 per share.
Rather than creating a Company and entering the underlying assets of the business, you could create a Company Shares account and enter:
- Shares held: 200,000
- Share price: $8
- Cost basis: Based on the client's acquisition of the shares
- Share price growth: Your planning assumption
- Ownership: James (Primary client)
- Acquired year: 2017
Voyant can then project the future value of the shares and any dividend income while allowing you to model future transactions involving the shares.
Modeling share price growth
Company Shares separates the value of the shares from the income those shares may produce.
The share price can be assigned a growth assumption, allowing the value of the holding to increase or decrease over the course of the plan.
You can also use the Steps functionality to change the share price or share price growth assumption in a future year.
For example, if shares are currently worth $8 but the adviser expects a significant valuation change following a future event, the share price assumptions can be stepped accordingly.
Training Note: Company Shares is valued using the number of shares and price per share. You do not need to enter the company's underlying assets to establish its value.
Modeling dividends
Dividends are entered on a per-share basis.
For example, if the client owns 10,000 shares and the company pays a $0.50 annual dividend per share, the modeled annual dividend would be:
200,000 × $0.50 = $100,000
A dividend growth assumption can also be applied when appropriate and will increase the annual distribution amount.
Dividends from Company Shares are treated consistently with other dividend income within the software.
Selling or gifting shares
One of the key advantages of Company Shares is the ability to model changes in ownership over time.
Shares can be sold or gifted using a number of shares.
You will have the option to transfer all ownership OR only a portion of the shares. You can adjust this by toggling off or on the "transfer all ownership" option.
Gifting shares
When shares are gifted, Voyant applies the existing US gifting treatment. The gift itself is generally modeled as a non-taxable event for the giver, subject to the existing gift and lifetime exemption logic, and the recipient receives the giver's original cost basis.
When shares are transferred to another owner, Voyant creates a separate Company Shares model item for the recipient rather than maintaining multiple owners within the same sleeve.
Training Note: A sleeve of shares can only have one owner. If shares are transferred to another person, the transferred shares become a separate model item for that owner.
How are Company Shares taxed?
Capital gains
When shares are sold, the software applies the applicable capital gains treatment based on the value and cost basis of the shares being sold.
The initial release does not provide specialized Qualified Small Business Stock (QSBS) treatment. If QSBS treatment is relevant to a client's planning scenario, be aware that the standard Company Shares calculation may not represent the client's ultimate tax treatment.
Dividends
Dividends are treated in the same manner as other dividend income modeled within the US software.
Understanding the annual order of operations
There is an important timing assumption to be aware of when modeling transactions and dividends within the same year.
Company Shares processes activity in the following order:
1. Acquire shares → 2. Sell or gift shares → 3. Distribute dividends
This means that the number of shares remaining after that year's acquisitions and transfers determines the shares available when the annual dividend is calculated.
Because Voyant is an annual planning model, this may not exactly match the timing of transactions and dividend record dates that occurred during the year.
Training Note: If an adviser is attempting to recreate a very specific sequence of transactions within the same calendar year, review the resulting dividend calculation carefully.
Company Shares in Year View
Company Shares appear within the Investments section of Year View.
At a high level, you can review information including:
- Total Market value
- Share price growth rate
- Total Dividend
Drilling into the holding provides additional detail about the client's position, including:
- Total shares owned
- Market value
- Dividends
- Shares added
- Shares sold
- Shares transferred
- Individual share sleeves
- Cost basis
This can be especially helpful when reviewing how a client's ownership changes over time.
Company Shares and estate planning
Company Shares can also be incorporated into the client's estate plan.
Shares may either be liquidated or transferred in specie, depending on how the asset is distributed through the estate.
If shares pass through the estate, they are included as part of the estate for applicable estate tax calculations. Shares transferred in specie to a beneficiary other than a spouse receive the applicable step-up in basis within the model.
This allows advisers to explore planning questions such as whether shares are intended to be sold at death or preserved and transferred to a particular beneficiary. This asset will be shown under savings and investments in the Legacy Section.
Company Shares vs. a standard investment
A standard investment may still be appropriate when you simply need to represent the value and growth of an investment.
Consider Company Shares when the shares themselves matter to the planning conversation.
For example:
Standard Investment:
"My client has approximately $500,000 invested in this holding."
Company Shares:
"My client owns 50,000 shares. They acquired those shares at a particular cost basis, receive dividends on them, intend to gift 10,000 shares in five years, and may eventually sell or transfer the remaining shares."
Company Shares allows those share-level details to become part of the plan.
Company Shares vs. the Company model
The most important distinction is what you are trying to model.
Use the Company model when the client's ownership of the business itself is important and you need to model the company's underlying financial picture.
Use Company Shares when the planning focus is the client's ownership of a specific number of shares and you do not need to model the underlying assets and expenses of the company.
Remember:
Own the business → Company
Own shares of the business → Company Shares