New Forest

10/08/2017

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

If you've ever had to submit a VAT return, you'll know how stressful it can be. Alan Rolfe of @HWB_Accountants has some advice for what to do if you've made a mistake... https://t.co/cHLnHkNpNa

Changes have been made to the Tour Operators Margin Scheme to help operators calculate the correct selling price of TOMS supplies https://t.co/F4febEJ90m

Let’s Talk

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