Section 176A Purchase of own shares – supplementary

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Amendments

Section 176A inserted by Finance Act 2008 section 48 as respects accounting periods ending on or after 13 January 2008.

(1) Subject to subsection (2), no sum shall be deducted in computing the amount of the profits or gains charged to tax under Case I or II of Schedule D in respect of any payment that is treated by virtue of section 175 or 176 as not being a distribution.

Is expenditure by my company on repurchasing the company's own shares tax-deductible?

(1) No.

(2) Subject to section 81(2)(n), subsection (1) shall not apply to so much of any payment as consists of expenditure incurred by a company to the extent that it is incurred on shares acquired by the company and given by it as consideration for goods or services, or to an employee or director of the company.

When is expenditure by a company in repurchasing its own shares allowed?

(2) The rule in (1) is disapplied if the payment for the shares is given as consideration for goods and services, or to an employee or director.