Enactment of ESC C16: Where are we now?

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I first warned back in February that the proposed enactment of ESC C16 (or the bus route to Nether Wallop, as I preferred to term it) may make the concession less generous than hitherto, explains CBW partner Andy White.

A number of contributors took me to task, particularly David W who pointed out that it was the number 77 that went to Nether Wallop, and I confess that I have rarely encountered an issue that has prompted such a vehement response.

Fortunately, most of the attacks have been directed at the government, HMRC and the Treasury Solicitor. In my view, all of these organisations fully deserve the criticism that has been directed at them.

It gives me no pleasure that my warning has been proved right, despite the fact that my firm operates a vibrant and successful CR & I department so I suppose I should be grateful for the government’s largesse in ensuring that our income is boosted by some frankly bizarre decisions.

Let’s first review the position as it was and as it now is (or will be from March 2012).

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10th Jan 2012 14:04

Total reserves or share capital only ??

It is unclear whether the enactment of the new legislation from 1 March 2012 and the limit of £25k applies to TOTAL RESERVES or just SHARE CAPITAL ??

For illustration; if a client has profit and loss reserves of £100,000 and share capital of £100 and wishes to apply ESC C16, will the £100,000 be subject to the £25k limit or is this only applicable to share capital ??

Many thanks.

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