Can your managers or the company buy you out?
Shows whether the company or your managers can pay for your shares, how much of the price you'd keep after tax, and the conditions that decide whether a buyback is taxed as a sale or as a much dearer dividend.
Your answer
Enter the price, your share of the company and who would buy to see whether they can pay, and what you'd keep.
About this calculator
For owners of a private limited company who want to sell their shares back to the company, or to the managers who run it. We check whether the buyer can find the money and work out what you keep after tax. For a buyback we also check the conditions that decide whether the price is taxed as a sale of shares or as a dividend (Corporation Tax Act 2010, sections 1033 to 1043), because a dividend can cost far more.
You type in the figures yourself: the profit the company can pay out and its spare cash from your accounts, or what your managers have and what the business makes each year. Your share, your family's share, the date you got the shares and what was paid in for them come from your share register and your own records. We don't read your accounts or Companies House. Your share of the shares stands in for votes, profits and assets on a winding up, and we assume your family's shares aren't part of the deal.
We don't cover buying shares back out of capital, in stages, or to pay inheritance tax, and we don't name or recommend any lender. It's for people who live in the UK, with England, Wales and Northern Ireland income tax. It doesn't replace the written clearance HMRC can give before you sign.
What happens to your answers
We don’t keep them. Your answers go to our server to do the sums and aren’t stored or logged. If you copy a link to your answers, they’re in the link itself, so only share it with people you trust.
How it’s worked out
First we check the buyer can pay. A company can only use profit it can legally pay out, and it must pay in full on the day it buys. Managers can use their own money plus a loan sized from the cash the business makes each year, with a cushion for the lender.
Then, for a buyback, we test five conditions: a trading company, mainly to help the business, shares owned 5 years (3 if inherited), your share falling to three quarters or less, and you and your family owning 30% or less afterwards. All met: it's taxed as a sale of shares. Any not met or not sure: the price above what was paid in for the shares is taxed as a dividend on top of your other income.
On a sale, your profit gets the lower rate for selling a business (Business Asset Disposal Relief) if you qualify, then the usual rates on gains. Stamp duty of 0.5% is paid by the buyer on top. In the example, the company buys back 60% for £300,000, every condition is met, and you keep £247,620.
Worked example
Yes, the company can pay for your shares, and you'd keep about £247,620 after tax.
2026/27 rates · the company buys your shares back · taxed as a sale of shares · lower rate for selling a business · your only gain this year · you live in the UK · England, Wales and Northern Ireland income tax
| Profit the company can legally pay out | £400,000 |
|---|---|
| Cash the company can spare, plus any new loan | £350,000 |
| Most the company can pay for your shares, on the day | £350,000 |
| Still short of the price | £0 |
| A trading company, shares not on a stock market: met | met |
| Mainly to benefit the trade: met | met |
| Owned 5 years by 20 October 2026 (met from 1 June 2020): met | met |
| Your share falls from 60% to 0% (at most three quarters): met | met |
| You and your family own 0% afterwards (at most 30%): met | met |
| Price for your shares | £300,000 |
| What you paid for the shares (taken off the price for the profit) | £6,000 |
| Profit on the sale | £294,000 |
| Tax-free yearly amount on gains | £3,000 |
| Part of the profit at the lower rate for selling a business (18%) | £294,000 |
| Less tax on the sale | − £52,380 |
| What you keep after tax | £247,620 |
| Stamp duty the buyer pays on top (0.5%, rounded up to £5, none at £1,000 or less) | £1,500 |
Worked out using HMRC's 2026/27 rates for Capital Gains Tax and dividends, and the conditions for a company buying back its own shares (Corporation Tax Act 2010, sections 1033 to 1063, and the Companies Act 2006). Not legal or tax advice.
Questions people ask
Why does a buyback taxed as a dividend cost so much more?
A dividend is added to your other income and taxed at up to 39.35%, and a big one can take away your tax-free allowance. A sale of shares is taxed at 18% or 24%, with the lower rate for selling a business if you qualify.
Should we ask HMRC before signing?
Yes. HMRC can confirm in writing that a buyback will be taxed as a sale of shares, and that the anti-avoidance rules for share deals don't apply. Your adviser can ask for both in one letter. It's also worth doing when your managers buy through a new company.
Who pays the stamp duty?
The buyer: the company on a buyback, or your managers on a sale to them. It's 0.5% of the price, rounded up to the next £5, with none at £1,000 or less. It doesn't come out of what you're paid.
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