New Forest

Thinking of winding up your company?

Up until 6 April last year, the distribution of cash to shareholders on the winding up of a trading company by a liquidator, was usually taxed as a capital gain, potentially taxed at just 10% with the benefit of entrepreneurs’ relief.

However, last year’s Finance Act introduced a targeted anti-avoidance rule that may tax such a distribution as a dividend at income tax rates up to 38.1% under certain circumstances.

HM Revenue and Customs have recently issued guidance in an attempt to clarify when the new anti-avoidance rule would apply.

Broadly the anti-avoidance is intended to catch situations where the old company is wound up and a similar business is carried on by a connected business. Note however, the distribution would only be taxed as a dividend at income tax rates if one of the main purposes of the transaction was to avoid tax. This is a complex area so please contact us to discuss your plans so you do not fall foul of the new anti-avoidance rule.

For further information on Winding up your company, please contact Tracy Jenkins on 023 8046 1202.

Latest Tweets

Making Tax Digital (MTD) for VAT is on course for April 2019. Here's what you need to know #makingtaxdigital #business #tax #southampton https://t.co/EfRevmcEqT

Our classic car day has gotten off to a good start with the sun finally arriving for some photos #classiccars #hampshire #business #southampton

Let’s Talk

Why not arrange a FREE consultation and find out what we can do for your business.