Q: My client, Alpha Limited, is a company that owns 70% of the issued share capital in Beta Limited. Both companies are UK resident. The remaining 30% is owned by an unconnected individual. Beta Ltd is proposing to buy back the shares from Alpha Ltd.

My understanding is that a company share buyback is by default a distribution to the shareholder unless the capital conditions in section 1033 Corporation Tax Act 2010 (CTA 2010) are met. The receipt will be treated as a distribution because Alpha Ltd has not met the period of ownership requirement. Is any corporation tax due as the distribution would be exempt being from one UK company to another UK company?