CG58645 | Co.purchases own shares: capital treatment: Condition B

Condition B is that the whole or substantially the whole of the payment, apart from any sum applied in paying capital gains tax charged on the redemption, repayment or purchase is applied by the person to whom it is made in discharging a liability of that person for Inheritance Tax charged on a death, and is applied in that way within two years after the death.

In exception, even if condition B is met then any payment made for purchase of own shares will be treated as a distribution if the Inheritance Tax liability could have been met without undue hardship in a different payment method apart from the purchase of own shares.