Readers’ forum: Buy back concession

Buy back concession

Several years ago a client company undertook a purchase of its own shares in relation to a retiring director/shareholder and Revenue clearance was obtained that the consideration paid for the shares could be taxed as capital.

It seems there was a misunderstanding regarding the number of shares in issue at the time of the buy-back and it has just come to light that the legal documentation effecting the buy-back did not reflect the entire shareholding owned by the retiring director/shareholder. Only a small number of shares had been overlooked; no dividends had been paid by the company during the intervening years since the buy-back; and the now retired director/shareholder is content that he received the correct amount of consideration for what he and the company thought was his entire shareholding.

The question we have is concerning the ‘tidying up’ of these stray shares that...