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So long, farewell! Company purchases of own shares

By Jennifer Adams, May 2021

Jennifer Adams considers the main reasons why some shareholders of a family-owned company may consider a purchase of its shares and the tax implications of doing so. 

Retirement for a family company member can be an emotive event. Someone who has spent much of their working life building up that business now has to hand over the reins to another.  

Exit routes 

A more practical problem is finding a tax-efficient method of extracting monies. The realistic option is via the capital route, as any capital gains tax (CGT) charged will be less than taking a salary, bonus or dividend. Withdrawals as capital can be effective either as a capital distribution on winding up (difficult and impractical if the company is continuing to trade) or by the sale of shares - either to an individual (external or)

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