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tax on variation of rights

tax on variation of rights attaching to shares

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Trading company has 3 unconnected shareholders holding A B C shares. The C shareholder wishes to exit but rather than the company purchase her shares, instead the company wish to significantly restrict the entitlements attached to this class of share (e.g. dividend only payable if certain event occurs/conditions met, no voting, no distribution on a winding up). In return for agreeing the restriction the company will pay her a sum of money. I assume this payment will simply be taxed as a distribution.

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