This guidance note sets out the clearance procedure and reporting requirements associated with the capital treatment of a share buyback. See the Purchase of own shares ― overview guidance note for an overview of this area and the Capital treatment for purchase of own shares guidance note for details of the conditions for ‘capital treatment’ for a relevant shareholder on the purchase of own shares by a company.

In situations where capital treatment applies to the repurchase of a company’s own shares, it is possible to obtain advance clearance from HMRC. The same clearance procedure may also be used for a repayment or redemption of shares.

Regardless of whether advance clearance is sought, taxpayers seeking to treat amounts received from selling shares back to the company as capital must report details to HMRC within 60 days of the share buyback.