Government proposes changes to the taxation of distributions and repayments of capital from companies

HMRC consults on aligning the taxation of distributions from non-UK resident companies

HMRC has published a consultation on proposals to modernise the UK tax framework for distributions and repayments of capital made by companies to individual and trust shareholders. A key feature of the consultation is a proposal to align the income tax treatment of distributions made by UK and non-UK resident companies by bringing distributions from non-UK resident companies within the statutory distributions regime.This proposal is likely to be…

Buybacks, demergers and capital reductions: HMRC proposes an overhaul

Amid all the noise around Tax Update 2026, one consultation has had less attention than it probably deserves. While reforms to VAT, PAYE and ITSA payments have dominated the coverage, HMRC has also proposed a substantial rework of how companies are taxed on distributions and repayments of capital. For businesses considering a share buyback, demerger or return of capital, the proposals matter. HMRC has been clear that shareholders themselves are …

Government proposes changes to the taxation of distributions and repayments of capital from companies

The last few weeks have been awash with minor and major reforms to taxation in the UK, as part of HMRC’s  Tax Update 2026. While the headlines have been stolen by changes to the way VAT, PAYE and ITSA are paid, for companies, proposals to alter the way that distributions and repayments of capital from companies are taxed could be far wider reaching. The changes will significantly change the tax treatment of share buybacks, demergers and returns …