CTM17570 - Distributions: purchase of own shares: special treatment for unquoted companies

CTA10/S1033

In certain circumstances, CTA10/S1033 provides that the distributions legislation does not apply to a payment made by an unquoted company (see CTM17507) on redeeming or purchasing its own shares.

The effect is that the vendor is treated as receiving a capital receipt. However, if the vendor is a share dealer, the receipt will still be trading income.

Clearance applications under CTA10/S1044 are the responsibility of the Clearance and Counteraction Team, (see below). The clearance procedure is intended to help companies but is not a statutory requirement.

Where a person claims that CTA10/S1033 applies but there is apparently no clearance notice officers should contact the Clearance and Counteraction Team.

Advance Clearance

A company proposing to make such a payment may ask HMRC to confirm either that CTA10/S1033 will apply, or that it will not apply. SP2/82 explains the procedure to be followed. (This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Public contact details are available at http://www.hmrc.gov.uk/cap/index.htm.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Clearance applications under this and other provisions may be combined. These include TCGA92/S138 (CG52631) and TCGA92/S139 (5) (CG52752) - company reconstructions; CTA10/S748 (CTM36880) - transactions in securities; and CTA10/S1091 (CTM17270) - demergers.

They should where appropriate be forwarded to the Clearance and Counteraction Team together.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)