Corporation Tax Act 2010 section 1046

Information and returns

Section 1046 sets out the reporting obligations that arise when an unquoted trading company buys back its own shares and treats the payment as not being a distribution under the share buyback rules.

• A company that treats a share buyback payment as falling within the special capital treatment rules must file a return with HMRC within 60 days, giving details of the payment and the reasons it qualifies
• Any person connected with the company must notify HMRC if they know of a scheme or arrangement that could affect whether the payment genuinely qualifies for capital treatment
• That notification must include particulars of the scheme or arrangement and must be given within 60 days of the person first becoming aware of both the payment and the scheme
• These requirements ensure HMRC has visibility of share buyback transactions and any tax avoidance arrangements that might undermine the conditions for capital treatment

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