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Online IR4 2004

Help IR4 2004 - Share repurchases

Generally, when amounts distributed to shareholders on cancellation or repurchase of shares fall below specified thresholds, the amounts are taxable in full to shareholders as dividends. When distributions on repurchase exceed those thresholds, or occur through the stock exchange, the distributions will be deducted from available subscribed capital of the company and will therefore be tax-free to the shareholders. However this is only to the extent that the distributions are not in lieu of dividends. If the subscribed capital of the company has been depleted, the distributions will be taxable.

Specific rules also govern the repurchase and subsequent sale of treasury stock.

The total value entered on the return should be the aggregate value of all distributions made by the company during the year in respect of company shares repurchased, redeemed, cancelled, or purchased as treasury stock.

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Date published: 02 Dec 2004

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