Readers’ forum: Share buyback

My client is looking to extract himself from a company in which he holds 60% of the shares through a purchase of own shares. I am satisfied that the requirements for capital treatment would apply if all of the shares were bought back at once but funding is not available so the plan is that there will be an exit in three equal tranches.

I know there is a problem if there are three separate disposals but understand it is possible to achieve what my client wants by using multiple completion contracts. This should enable the entire beneficial interest of the shareholder to be disposed of at the date of the contract and thus meet the requirements for capital treatment.

However I am confused by HMRC’s guidance at CG58644. This relates to the ‘connection test’ post buyback where the shareholder must not directly or indirectly possess...