Transfer or cash?

A client company of ours is looking to purchase its own shares by transferring a property to a retiring shareholder instead of paying cash.

At first sight this would not appear to be legally possible as HMRC guidance in the Company Taxation Manual at CTM17505 states that a payment must be made in cash.

However this appears to contradict the decision in BDG Roof-Bond Ltd v Douglas [2000] 1 BCLC 401 where the court held that a transfer of assets is possible being akin to a dividend in specie.

Companies Act 2006 s 691 merely requires that the shares must be paid for on purchase – there is no specific requirement for this to be in cash.

My questions are as follows.

• First is the view of HMRC correct?
• Second if it is...