Statement of Practice 4 (1989)
Published 19 April 1989
© Crown copyright 1989
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If the purchase of its own shares by a company resident in the UK gives rise to a distribution, and a shareholder receiving such a distribution is itself a company, the distribution is included in the consideration for the disposal of the shares for the purposes of the charge to Corporation Tax on chargeable gains. In HM Revenue and Customs (HMRC) view the effect of Taxes Act 1988 ss 208, 345(3) (now TCGA 1992 s 8(4)) is that the distribution does not suffer a tax charge as income within the terms of TCGA 1992 s 37(1). HMRC will apply this Statement of Practice where a company purchases its own shares after 19 April 1989.