1st Friday
Tax Chat

Can my company buy some of my shares…

Can my company buy some of my shares…

…so that I pay tax at a rate of 10% with entrepreneurs relief?

This is a question that we are often asked, we expect it will become even more popular with the increase in tax on dividends from next April.

The answer is yes, but only providing that certain conditions are met.

One condition is that your shareholding should be substantially reduced and another is that you (and your associates) should not hold more than 30% of the shares after the buyback.

If these conditions are not met the cash extracted is taxed in the same way as a standard dividend.

Even though it might not help with remuneration planning, the ability for a company to buy back its shares can be a very useful tool for succession planning and also to remove dissenting minority shareholders

For more information contact Lesley Sutton on 01484 538351 or email

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