As you may be aware, in a broad attempt to reduce perceived imbalances in the UK tax system, HMRC released a consultation document in December governing distributions made by a company.
Part of the proposed change is the introduction of a new Targeted Anti-Avoidance Rule (TAAR) that would apply to certain distributions to shareholders following the Members’ Voluntary Liquidation (MVL) of a company, which subject to the consultation, could become effective from 6 April 2016. This TAAR would treat such distributions as income not capital where:
In view of the consultation, if you have a client who is considering implementing a MVL to make a capital distribution and possibly take advantage of entrepreneurs’ relief, it may be sensible to implement the MVL as soon as possible.
We at Bailey Ahmad Business Recovery specialise in supporting directors, shareholders and their advisors in implementing low cost MVL solutions.
If you have a client that needs advice or would like further information, please contact us at firstname.lastname@example.org or give us a call on 0208 662 6070