CG58670 | Co.purchases own shares: capital treatment: Submitting a clearance

A company can make a clearance application prior to making a payment on the purchase of its own shares. They will be able to obtain advanced clearance from the Board that any distribution would be an exempt distribution for the Income Taxes Act.

Clearance applications are the responsibilities of the Clearance and Counteraction Team in the Business, Assets and International Directorate.

For guidance on making a clearance application please see https://www.gov.uk/guidance/seeking-clearance-or-approval-for-a-transaction.

Customers may argue that the relevant conditions in CTA10/S1033 - 1048 are not satisfied and that the purchase should be treated as a distribution. Indeed taxpayers can apply for advance clearance under CTA10/S1044 that the Commissioners for Her Majesty’s Revenue and Customs are satisfied CTA10/S1033 will not apply.

See CTM17570 for more detail.