I've been asked to look at the winding up of a FURBS for a client.
The FURBS only asset is cash and he has asked if there are any tax consequences of the wind up and the distribution of the funds to him as sole beneficiary? I think that the payment is tax free, as the contributions into the FURBS were taxed on the way in and the FURBS has always paid tax on it's income and capital gains. HMRC have also said similar when their technical department was queried but obviously won't give any advice.
The client would also like to loan some money from the FURBS now to purchase a new business, which he needs very soon so pre the wind up of the FURBS. Does anyone know if this would be caught by the disguised remuneration rules? It talks about commercial loans but I think this only applies where the normal course of business is money lending.
Presumably we could draw up a simple loan deed to state that the loan would be cancelled upon the wind up of the FURBS to avoid the need for the client to repay the FURBS the loan to only get the funds back.
Does anyone have experience of this?