Company is considering an own purchase. Assuming HMRC will otherwise give clearance, all factual conditions are met apart from one - after the buyback the vendor will hold more than 30% of the loan capital and equity (he will hold no shares but will continue to have a pre-existing loan that will breach the limit). We have considered a pre-transaction bonus issue to get round this, but it has been suggested that section 1026 of CTA 2010 would block this. However, our argument is that section 1026 applies only for the purposes of Chapter 2 and should not therefore disturb the capital treatment of the payment, which is in dealt with Chapter 3.
Thoughts, anyone? With thanks in advance.