Under Transactions in Securities (TiS) anti-avoidance rules HMRC can seek to tax capital payments to shareholders at dividend tax rates rather than at the more attractive capital gains tax (CGT) rates.

Tightening of the TiS rules has also seen a rise in the number of businesses facing challenges from HMRC over share capital reductions.

TiS and its implications is extremely complicated, so you will need to take professional advice if you want to ensure you comply with the rules.

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