Mike Lane and Richard Jeens examine the options available and the related tax issues
The ongoing global economic uncertainty has resulted in many groups that have successfully navigated the recessionary storm holding significant surplus cash. In the absence of prudent investment opportunities these groups have been increasingly pressured to return this cash to shareholders disappointed with low returns on equity.
Cash is usually returned to shareholders by way of a special dividend a tender offer (or share buy back) or a so-called B share scheme. Similar results can be achieved using a reduction of capital or a scheme of arrangement but while having the advantage of not requiring distributable reserves nor incurring stamp duty ...
