Tax and your investments

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19. Buybacks

Sometimes a company that has traded profitably and built up substantial reserves uses its resources to go into the market and buy back its own shares. It does not retain the shares, but cancels them, which effectively means it is returning their value to shareholders .

If you sell your shares back to the company, it is a chargeable event for capital gains purposes. The capital gain is calculated in exactly the same way as it would be for a disposal in the open market.

1. Keeping it legal 2. How HMRC treats your investment income 3. Keeping records 4. The basis of dividend income 5. Dividend income 6. Interest income 7. Interest on Treasury Stock 8. Capital gains tax basics 9. Base cost 10. Indexation 11. Taper relief 12. Indexation and taper relief - together! 13. Date of acquisition 14. Disposal proceeds 15. Disposal of a holding with a history 16. Takeovers 17. Bonus/scrip issues 18. Share splits 19. Buybacks 20. Rights issues 21. Share options 22. Beneficiaries and minors 23. Calculating your CGT liability 24. Using your annual CGT exemption 25. Transfers between spouses 26. ISAs 27. Delaying capital gains 28. Other tips to reduce CGT liability 29. Conclusion