A director held all the shares in company A whose only asset was a commercial building let to an associated trading company B that went into liquidation. A had to sell the property to meet the bank guarantees of B. A applied for ESC C16 which was granted. Surplus amount from original sale of building, after meeting the bank guarantees, was distributed by A and non-business asset taper relief claimed (after estimated proportion of cost for the shares purchased and indexation). CGT was paid. A had to be kept open until B was liquidated (A effectively ‘dormant’ in the interim). After about 4 years, liquidation of B is now finalised and A, a floating charge holder, has now received some money back from the liquidator in 2 instalments. A second distribution has just been made to the director in 2007/08, but not enough to trigger a CGT liability, if calculated on a ‘part-disposal basis’. If A now distributes the balance to the director before 6 April 2008, CGT will be payable. If A distributes the balance after 6 April 2008, no CGT is payable under the new rules. I have assumed that NBATR is available on the second distribution as the company was in the process of ‘winding up’ in the 4 year period. Is the option to delay a distribution after 6 April 2008 available and are there any pitfalls concerning this transaction? Note - 4 years ago it was initially unknown how much or whether A would have received some monies back from the liquidator.
Any thoughts welcome. Thanks.
Unrelieved
Unrelieved