A Company Share Buyback (or “Company Purchase of Own Shares”) is a common mechanism for shareholders to dispose of their shareholdings in private limited companies; typically to facilitate a shareholder exit without the other shareholders having to personally finance the purchase of shares or bring in a third party. In most cases, the company purchases the shares from the original shareholder and the shares are cancelled.
Section 18A of the Corporation Tax Act 2009 states that a UK resident company is entitled to make a Foreign Branch Exemption Election (“FBEE”). If a FBEE is made adjustments are required to be made in the calculation of the company’s total taxable profits. This means that any accounting profits or losses that arise in a foreign permanent establishment (“PE”) will not be included in the profits/losses chargeable to UK Corporate Income Tax (“CIT”).
At this time when many companies are looking for some additional cash, far more have been looking at R&D tax relief and being more open to consider whether their activities qualify as innovative enough to justify a claim.
What is ATED?
The Treasury and Chancellor previously suggested that more effective tax changes would be introduced after undertaking consultation and seeking comment on the output from such consultation exercises. Therefore, instead of this being lost in the Budget Announcement a separate date, Tax Day, was set for the consultation announcements to be delivered – 23 March 21.