Tax Calculators & Tools

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Topic: Capital gains tax

Company purchase of own shares tool
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Company purchase of own shares tool

Company purchase of own shares tool

Where an unquoted company purchases its own shares the shareholder is taxable on the amount they receive after deducting the shares’ cost. The payment counts as income unless certain conditions are met in which case it is taxed as capital; this is usually more favourable. One of the important conditions is the so-called "substantial reduction in shareholding" rule.

Purpose of the tool

Our tool works out whether or not the substantial reduction in shareholding condition is met. It can make the calculations required for companies with up to three different classes of share.

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