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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.