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.

A company which applies the capital treatment to a purchase of own shares must report details to HMRC within 60 days of the share buyback, as set out in more detail below.