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CD 25: Treasury stock acquisitions
or “Rules for companies buying and holding their own shares”
You could also call this:

“How payments for shares are treated when a company closes or moves overseas”

When a company is closing down or moving overseas, you might get paid money for your shares in the company. This payment is only counted as income (called a dividend) if it’s more than two things:

  1. The amount of money that was originally put into the company for each share.
  2. A special amount called the ‘available capital distribution amount’.

If the company is a special type called a statutory producer board, the money you get back isn’t counted as income if it was originally charged to help build up the company’s assets.

Even if the money isn’t counted as income because of this rule, it’s still treated as if you’re getting back some of the money you put into the company.

These rules apply when the company is closing down, or when it’s treated as if it’s paying you money because it’s moving overseas.

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Next up: CD 27: Property made available intra-group

or “Rules for when property shared between related companies isn't a dividend”
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Part C Income
Income from equity

CD 26Capital distributions on liquidation or emigration

  1. This section applies when a shareholder—

  2. is paid an amount in relation to a share on the liquidation of the company:
    1. is treated under section FL 2 or FL 3 (which relate to the treatment of emigrating companies and their shareholders) as being paid an amount in relation to a share in the company.

      1. The amount paid is a dividend only to the extent to which it is more than—

      2. the available subscribed capital per share calculated under the ordering rule; and
        1. the available capital distribution amount calculated under section CD 44.

          1. If the company is a statutory producer board, the amount is not a dividend to the extent to which it is a return of a levy charged specifically for capital development.

          2. An amount that is not a dividend as a result of subsection (3) is nevertheless treated as a return of capital for the purposes of the capital limitation.

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          Notes
          • Section CD 26(1)(b): amended (with effect on 30 August 2022), on , by section 13 of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).