Taxes Consolidation Act 1997 section 180

Additional conditions

Section 180 sets out additional conditions that must be met for a company share buyback to qualify for capital gains tax treatment rather than being treated as a distribution, focusing on the vendor's post-buyback connections and anti-avoidance rules.

• After the buyback, the vendor must not be connected with the purchasing company or any company in its group (a group being a company and its 51% subsidiaries).
• The buyback must not be part of a scheme or arrangement designed to temporarily reduce the vendor's shareholding just to satisfy the conditions for CGT treatment.
• Any transaction occurring within one year after the buyback is presumed to form part of such a scheme or arrangement.
• A person is considered connected with a company if they control it or hold a 30% or greater interest in its capital, assets, or voting rights.