Hi,
I consult with a few companies including some start-ups, one of which has offered me some equity in exchange for a fixed amount of my services.
Let's assume I'm OK with the offer in principle and fully aware that this equity has a high chance of being worth nothing. I'm also aware that if this start-up gets going there will be dilution if other investors come along, other investors with preferences shares, and CGT due on any exit, etc.
My question is more about how this would be dealt with now in terms of taxes. Do I need to record any income for this transaction (which would count toward corporation tax)? I'm set up as a limited company, accounting on a cash basis so there's no actual cash changing hands.
Anyone done this in the past? Any other pitfalls I should be aware of?