Procedures for Buy back and applying for Entrepreneurs relief

Procedures for Buy back and applying for...

Didn't find your answer?

HI, 

I am helping one of my client (Private limited company) for buy backing the shares from it's director. Shareholder wants to apply for Entrepreneurs relief for capital gain. My question is that is it required to take any prior permission from HMRC or companies house ? Entrepreneur's relief is only available for capital distribution ? If the company has general reserve and distribute it to buy back the share then relief is not available ?

Your help and thoughts are much appreciated. 

Replies (4)

Please login or register to join the discussion.

By johngroganjga
07th Apr 2015 12:59

No "prior permission" to

No "prior permission" to claim entrepreneur's relief is required. If it was, it would be obtained from HMRC - certainly not from Companies House. Claims for tax relief are none of Companies House's business.

If a taxpayer makes a disposal to which he thinks entrepreneur's relief applies he claims it on his tax return when he declares the capital gain.

Entrepreneur's relief is only available when there is a capital gain. If the transaction contemplated is a purchase of its own shares by a company you will need to check out the conditions for such a purchase to be a capital disposal by the vendor shareholder.

Thanks (1)
avatar
By Chintan
08th Apr 2015 14:28

Can anyone guide me on exempt

Can anyone guide me on exempt distribution when company purchase of Own Shares. Is it still applicable ?

 

In my case, wife is getting divorced from husband's company and wanted to sell the shares to her company. Is it a lawful ground for applying above?

 

 

https://www.gov.uk/government/uploads/system/uploads/attachment_data/fil... - I have read from this link

Thanks (0)
Portia profile image
By Portia Nina Levin
25th Apr 2015 11:01

(No subject)

Thanks (0)
By johngroganjga
08th Apr 2015 14:35

Not sure what you mean by "exempt distribution".

A POS is either permitted by law or it is not.

If permitted by law, it either qualifies to be treated as a capital transaction for tax purposes, or the excess over the subscription price of the shares is taxed as a dividend.

Please clarify what it is that the wife wants to sell to "her company".

Thanks (0)