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Buybacks revisited
KEY POINTS
- Multiple completion buybacks allow private company to buy back shares in an affordable way.
- Conditions to ensure capital gains tax treatment rather than distribution treatment.
- Advance clearance can be applied for but not on the availability of entrepreneurs’ relief.
- HMRC appears to be resisting claims to entrepreneurs’ relief on unpaid completion proceeds.
It is more than five years since I wrote about multiple completion buybacks (‘Multiple attraction’ Taxation 13 October 2011) but I still receive queries on the subject from readers. It seems HMRC may also be trying to move the goalposts in relation to the availability of entrepreneurs’ relief for the selling shareholder.
In a nutshell a multiple completion buyback is an arrangement by which a private company can buy back shares from a difficult shareholder or one who wishes to...
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