![thompson](https://www.taxation.co.uk/images/default-source/files/field/image/thompson.jpg?sfvrsn=c61aa663_2)
The beneficial tax treatment that is available when a company purchases its own shares.
KEY POINTS
- 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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