Share buy back in private company

[david@ictoc.com]

We are planning a share buy back for our company so that my 48% shareholding is purchased by the company. I understand that shares can only be brought by the company from distributable profits. The company does do have enough distributable profits currently. Can I agree a deferred quarterly payment schedule for the next 3 years, thereby funding the share buy back from future profits?

[AvocadoK]

Yes, it is possible to do this. In effect, the purchase may be done in tranches, with each being conditional on there being sufficient distributable profits at the time.

If you want to get CGT treatment for the buy back, you will have to enter into an agreement now, to crystallise the disposal, and then have completion phased over the required period. This means all the CGT is paid in one go, but this may be better than the alternative (which is to have it taxed as income). There are numerous other conditions for CGT treatment.
AK