This Content Was Last Updated on November 5, 2015 by Jessica Garbett
From today the ESC C16 HMRC concession re treating the distribution of the reserves of a company during informal liquidation as a capital payment – and thus subject to Captial Gains Tax – becomes a statutory relief, not a concession, but subject to a new £25,000 cap.
Where distributions over £25,000 are necessary, either a formal liquidation process will be necessary – costly – or distrubutions will need to be made as revenue and subject to Income Tax at a potentially higher rate.