Loss of Office Payments

Loss of Office Payments

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Ltd Company sells its trade and assets, ceases to trade and shortly afterwards commences winding up procedures.

Are the directors (2) and employee (1) entitled to a non taxable compensation for loss of office payment ?

My thoughts are directors (who are also the shareholders), No

Employee - possibly - but does this depend on their relationship to the directors?

Also, can anyone point me to the legislation?

Thank you

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By Portia Nina Levin
25th Apr 2015 14:01

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By Michael Beaver
10th Jul 2014 23:09

From memory...

If the company / trade is winding up, then the tax free limit on termination payments is limited to three times the statutory redundancy amount.  I'm not aware that Directors have different treatment if they are being terminated in their role as employees.

If terminated as part of a going concern, then termination payments that are not contractual are tax free up to £30,000.

 

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