SolvedCTM20080 | ACT: General: Bonus issue of shares - repayment of share capital
From HM Revenue & Customs · Company Taxation Manual
ICTA88/S210
A company may make a bonus issue of redeemable or irredeemable shares at the time of, or following, a repayment of share capital, CTM15420. This may rank as a qualifying distribution under ICTA88/S210.
Where an issue made in such circumstances is of redeemable shares, that issue will not be a distribution by virtue only of ICTA88/S209 (2)(c), CTM20075, and will therefore be a qualifying distribution.