In Bostan Khan v HMRC [2018] TC0752, an individual who personally bought out controlling shareholders found that the subsequent purchase by his new company of his shares did not qualify for Capital Gains Tax (CGT) treatment. His subsequent attempt to claim that the transaction was a trade failed too.

A company Purchase of Own Shares is treated as a capital disposal when the selling shareholder and company meet the various qualifying conditions.

The FTT found that:

Comment

Curiously, given the amount of coverage of this topic, it is yet another case where professional advisers seem unaware of the purchase of own share rules.

Useful guides

Exit strategies: Index 
Company owners have a number of options available to them when it comes to passing on their business or realising their investment.

Reorganisations: Case Study 6
Step by step with tax clearance: how to buy out a retiring shareholder

Purchase of Own Shares
Subscriber guide

Purchase of own shares: Masterclass 
Subscriber detailed checklist & steps

External links

Bostan Khan v HMRC [2018] TC0752

 


 

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