Bona Vacantia £4K concession on strike off withdrawn

Bona Vacantia £4K concession on strike off...

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Just received a newsflash from CCH that, from 14 October, the Treasury Solicitor has withdrawn the concessiony £4K share capital sum by which a company can repay its share capital to its shareholders without Charles & his Mum knocking on the door with the 'evies.

So advice is to reduce the company's share capital to a nominal £1 before going for strike off, under chapter 10 Cos Act 2006.

No doubt connected with the proposed £4K limit for capital distribution under ESC C16 (new).

The thought does cross my mind that if I went ahead without the above change, would one of The Windsors actually pop around and, if so, when I got a signature or ID how much could I get for it on Ebay?

Replies (7)

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By carnmores
24th Oct 2011 15:01

well you would have to get a new

scarf!

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By George Attazder
24th Oct 2011 15:42

This came up in a thread recently

https://www.accountingweb.co.uk/anyanswers/question/esc-c16-14-october-2011

The inference I'd drawn from the Treasury Solicitor's press release is that they would not be taking any action, regardless of the amount of share capital distributed, unless a disadvantaged creditor came forward with a claim.

The inference is mine though.  No such thing is explicitly stated in the press release.

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Teignmouth
By Paul Scholes
24th Oct 2011 15:49

Did wonder

George - yes did wonder if anything drastic would happen over say £100, suppose best practice is to tell the client to stick the cash in a pot by the door, just in case?

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By ireallyshouldknowthisbut
24th Oct 2011 16:13

.

Joking aside, I was wondering about this, given a lot of businesses have £100 in share capital, are they really going to go after this in practice? And if so by what mechanism? There is no point in dancing about complying with a technical rule that is not enforced.

I know its not that hard to cancel them, but I do wonder how they will approach what must be 1000's and 1000's of small co.s being struck off the register every year without advice of any sort who have £100 of share capital.

Edited to add - thats what happens when the phone rings! Ignore me.

 

 

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Teignmouth
By Paul Scholes
24th Oct 2011 16:44

The alternative professional approach

Leave £100 in the bank account and let the bank sort it out, bit like a tip? At least it would give the bank something to do.

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Nichola Ross Martin
By Nichola Ross Martin
25th Oct 2011 11:44

More advice

I reported this several weeks ago in my web-update, and I have some pretty good guidance on this on my site - clieck on Companies > Ceasing trading,  if you are interested.

You will need a capital reduction in the future (more guidance on this too on my site), but I think that once accountants get into the swing of this it will not be such a big deal,

The big deal is that HMRC will be withdrawing ESC C16 - I expect news later in the Autumn and so the Treasury Solicitor had to drop its concession.

Virtual Tax Support for accountants: www.rossmartin.co.uk

 

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Teignmouth
By Paul Scholes
25th Oct 2011 17:08

Thanks Ross

I agree the capital reduction procedures are relatively straight forward but I still think the "in reality" question from the client will be "will the TS really come after me for £100?"  Time will tell I suppose.

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