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Starting a new company after dissolution

Time limit?

My client wishes to dissolve his limited company, as it is no longer trading (he was a contractor, but is now employed). The company has assets of less than £25k, and therefore I intend to advise him to submit DS01 to Companies House and distribute the remaining assets, which will be taxed as capital and will be covered by the annual Exempt Amount and the remainder subject to Entrepreneur's Relief.

He does not yet know his future plans once his current short-term employment contract comes to an end. Is there a time limit before which he cannot set up another company offering contracting services?

I had thought that there was a limit in place (and that this was covered by recent legislation in the past year or two), but have searched for this information for quite some time without success. Any advice would be much appreciated.

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By Matrix
09th Nov 2017 14:54

The two year anti-avoidance measure only applies if the company has been liquidated.

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By Dib
to Matrix
09th Nov 2017 17:17

Is this a wind-up?

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to Dib
09th Nov 2017 19:55

The question, or the answer provided?! It was a genuine question to which I do not know the answer.

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to sparkler
09th Nov 2017 20:12

Got to be a wind up surely?

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By Dib
to sparkler
10th Nov 2017 13:37

Cryptic - the legislation applies when a company is wound up - that is the phrase used in the legislation, not "liquidated"

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to Dib
10th Nov 2017 13:48

Is there a difference?

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to Dib
10th Nov 2017 13:50

Thank you for the clarification.

Interestingly, I have found an overview of "ceasing to trade" by Nichola Ross Martin which states "A Targeted Anti-Avoidance Rule (TAAR) has also been introduced to target ‘phoenixing’. Broadly distributions on a winding up will be taxable as income if within two years the individual (or someone connected with them) carries on a similar trade or activity.

This expanded definition and TAAR should not extend to a distribution on striking off, where the £25,000 limit mentioned above will instead apply."

In my case, the distribution would be on striking off the company due to this being a voluntary dissolution, implying that the TAAR does not apply as there is the £25,000 limit instead. Or have I misinterpreted Ms Ross Martin's paper?

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to sparkler
10th Nov 2017 13:53

I'm losing the will to live now.

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By Ruddles
to Dib
10th Nov 2017 13:50

It's not cryptic if you understand the difference between dissolution and winding up.

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By Dib
10th Nov 2017 16:23

I appreciate that. My "cryptic" was meant to my earlier post "Is this a wind-up?"

Edit: Meant as a response to Ruddles

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