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22 September 2015 / Charlie Thompson
Issue: 4519 / Categories: Comment & Analysis , Income Tax , Investments
The beneficial tax treatment that is available when a company purchases its own shares.
  • The new income tax charge on dividends may make share disposals at retirement more popular.
  • Specific conditions must apply for a company share purchase to be treated as a capital disposal.
  • The tax advantages of capital treatment.
  • Treatment of the share sale as income may be beneficial in some circumstances.
  • The importance of the 5% and 30% shareholding limits.
The changes announced to income tax rates on dividends which come into effect in April 2016 will increase tax liabilities for the shareholders of many owner-managed limited companies – for example where they may have been intending to draw accumulated profits as dividend income during their retirement. As a result under the right circumstances a company purchase of...

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