[CG58650] Co.purchases own shares: capital treatment: CGT liability
Where CTA10/S1033 applies, the payment when the company purchases its own shares is not a distribution for the purposes of the Corporation Tax Acts. The payment is included in calculating the chargeable gain or allowable loss on the disposal of the shares. Under TCGA92/S37(1), any amount that is subject to Income tax is excluded from the calculation.
No chargeable gain or loss can arise to a UK incorporated company when it purchases its own shares. CA06/S706(b) treats the purchased back shares as cancelled therefore the company does not acquire shares on purchase nor dispose on cancellation. CA06 also provides a similar treatment for shares held in treasury.