Tax changes made in April have generated a record number of solvent liquidations as reported by The Association of Business Recovery Professionals, R3.
As at 6 April 2016 directors winding up a solvent company can no longer claim Entrepreneurs’ Relief from Capital Gains Tax (CGT) due on any gains if they continue to work in the same trade.
Change in legislation
The change in legislation was to stop individuals avoiding income tax by keeping profits in one company, winding it up, and thereafter paying a reduced rate of CGT before starting a new company.
In March a record 2,663 liquidations were processed, representing an increase of over two and a half times more liquidations than the previous record of 992 which was set in April 2015.
For full details and comments from Andrew Tate, R3 president view the the R3 new article.
For assistance with winding up a solvent liquidation please contact Amanda Ireland or Alison Collier on 01795 433655 for further details.
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