I am looking for some assistance regarding an informal strike off query if possible.
We work with a client who has taken the decision to strike their company from the register owing to their net assets being £18,500 at the date of cessation (falling below the £25,000 limit).
In the cessation accounts, the balance sheet consists of:
- Overdrawn DLA - £18,500
- Bank - £20,000
- Corporation tax - £20,000
- Equity - £18,500
As you will note from the above, the remaining equity is exactly the same as the overdrawn DLA and it is our understanding that the overdrawn DLA can be reconciled as a distribution of capital in specie and as a result of this the client will be able to utilise their CGT annual exemption and the remainder would be subject to CGT at 10% under ER.
When time allows, I would be grateful if you could let me know if this would be an appropriate approach based on your understanding of the striking off process.
Thanks in advance.