CTM17640 - Distributions: purchase of own shares: treatment of purchase price in hands of dealer

Where a company purchases its own shares from a dealer (see CTM17630).

• the purchase price is a trading receipt of the dealer,

and

• no part of the purchase price is chargeable on the dealer as a distribution received.

Before 6 April 1999 the company purchasing its own shares from the dealer had to account for ACT on any distribution unless ICTA88/S225 (now CTA10/S1033) applied: see CTM17570. This was despite the fact that the dealer was not entitled to any tax credit.