Tax writer Bloomsbury Professional
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Disincorporation part 2: Get the details right


Mark McLaughlin, co-author of ‘Incorporating and Disincorporating a Business’ looks at further important considerations for company owners when disincorporating their business.

7th May 2020
Tax writer Bloomsbury Professional
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Disincorporating a business has tax implications for the company and its shareholders. In part one of this series, I looked at tax implications for the company. In this article, I examine the tax implications for individual shareholders. 

Continuing the example of Crumbs Ltd and Bill, it was decided by Bill (as the sole director and shareholder) to have the company wound up. The liquidator will distribute the catering business to Bill so that he can operate the same business as a sole trader.  

The distribution of assets to shareholders under a formal winding-up generally falls to be treated as a capital distribution, in consideration of the disposal (or part disposal) of the shareholders’ shares (TCGA 1992, s 122(1)).

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By happyface
11th May 2020 12:21

Just a short query.
If a company is liquidated, and the company director/ shareholder became employed in the same trade (ie in the company's main customer), would this come under anti phoenix TAAR provisions and get caught under the condition below:
##The individual continues to carry on, or be involved with, the same trade or a trade similar to that of the wound-up company at any time within two years from the date of the distribution;###

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