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HMRC internal manual

Company Taxation Manual

Distributions: general: repayment of share capital - bonus issues - exceptions

CTA10/S1026 (3) limits the operation of CTA10/S1026 (2). This provides that CTA10/S1026 (2) does not prevent a repayment of bonus shares being treated as a repayment of share capital if:

  • the bonus shares were not redeemable shares, and
  • the repayment takes place more than 10 years after the issue of those shares, and
  • the company making the repayment is not a company within CTA10/S739 (broadly an unquoted or closely controlled company) - see CTM36840.