672. Treasury shares: treatment of proceeds of sale
(1) Where shares held as treasury shares are sold, the proceeds of sale must be dealt with in accordance with this section.
(2) If the proceeds of sale are equal to or less than the purchase price paid by the company for the shares, the proceeds are treated for the purposes of Part 22 (distributions) as a realised profit of the company.
(3) If the proceeds of sale exceed the purchase price paid by the company an amount equal to the purchase price paid is treated as a realised profit of the company for the purposes of that Part, and
(4) For the purposes of this section—
(a) the purchase price paid by the company must be determined by the application of a weighted average price method, and
(b) if the shares were allotted to the company as fully paid bonus shares, the purchase price paid for them is treated as nil.