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Extra-Statutory Concession C16 (ESC-16)

19 Jun 2013
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Since the enactment of Extra-Statutory Concession C16 into the Extra-Statutory Concessions Order 2012, from 1 March 2012 the rules changed to limit distributions which attract capital treatment to £25,000 on the dissolution of a company.

Should total distributions exceed the £25,000 limit, then distributions will be treated as a dividend income (this attracts Income Tax rates of tax).

Shareholders wishing to wind a business down should therefore place their company into a Members Voluntary Liquidation ('MVL') such that no £25,000 limit will apply and distributions will be treated as a capital receipt and therefore subject to Capital Gains Tax rates, including where applicable entrepreneurial relief at 10%.

Contact Yorkshire Insolvency for further information.