175 Purchase of own shares by quoted company

Summary

A buy-back (including the redemption, repayment and purchase) of its own shares by a quoted company (or of its own shares by a subsidiary of a quoted company) is not treated as a distribution provided that the redemption, repayment or purchase does not form part of a tax avoidance scheme.

Quoted companies are required to notify the Revenue Commissioners of any share buy-backs undertaken in an accounting period indicating whether the buy back is to be treated as not being a distribution and to include such notification in the company’s annual corporation tax return or such other form as may be prescribed by the Revenue Commissioners.

Details

(1) A buy-back (including the redemption, repayment and purchase) of its own shares by a quoted company is not treated as a distribution provided that the redemption, repayment or purchase does not form part of a scheme or arrangement the main purpose or one of the main purposes of which is to enable the owner or owners of the shares to participate in the profits of the company or of any of its 51 per cent subsidiaries without receiving a dividend.

(1A)(a) Quoted companies must notify the Revenue Commissioners of any payment on the redemption, repayment or purchase of its own shares undertaken in an accounting period indicating whether the buy-back is to be treated as a distribution or not. The notification must be made by the company not later than 12 months from the end of the accounting period in which the payment was made.

(1A)(b) Notifications under subsection (1A)(a) shall be given by the company in its annual corporation tax return for the accounting period of the company in which the payment is made or in such manner and form as may be prescribed by the Revenue Commissioners.

(2) References in subsections (1) and (1A) to a quoted company include references to a company which is a member of a group of which a quoted company is a member.

Commencement

These arrangements apply to payments referred to in this section which are made on or after 4 February 2010.

Relevant Date: Finance Act 2021