Can someone double check that my understanding is correct regarding the anti-phoenixing legislation and property companies please? My client has a BTL property company, and they want to wind up the company. They have been selling off the properties within the company recently, and all but one of the properties have been sold (the client wants to keep this personally). So there will be a distribution of the funds and also a distribution in specie of the remaining property. Technically due to the anti-phoenixing legislation, for the capital distribution to be subject to CGT rather than income tax, he could not let out this property for at least two years after the winding up, as it would be participating in the same trade.
It seems to me that the client should either sell the property prior to the wind up (which I believe he would not like to do) or avoid letting out the property for two years after the wind up (it’s not worth looking at the dividend vs CGT argument!).
Many thanks for anyone's confirmation on this,