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Between 1991 and 1993, my client company issued shares to its shareholders. The shares all qualified for business expansion scheme (BES) relief at the time and the relevant certificates were obtained.
The shareholders wish to withdraw cash from the business. One option is to declare a first dividend, but I am not aware of any particular tax advantages under the BES rules which would make this attractive to the shareholders who are all liable at the higher rate. The other option is for the company to purchase its own shares, but would BES relief for capital gains tax be allowed?
Between 1991 and 1993 my client company issued shares to its shareholders. The shares all qualified for business expansion scheme (BES) relief at the time and the relevant certificates were obtained.
The shareholders wish to withdraw cash from the business. One option is to declare a first dividend but I am not aware of any particular tax advantages under the BES rules which would make this attractive to the shareholders who are all liable at the higher rate. The other option is for the company to purchase its own shares but would BES relief for capital gains tax be allowed?
Readers' advice would be very much appreciated.
Query T16 868 — Scottie.
Reply by Hodgy:
TCGA 1992 s 150(2) provides that where a taxpayer disposes of shares issued after 18 March 1986 on which relief has been given under the business expansion scheme and not...
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