SHAREHOLDERS FUNDS AFTER CO CEASES TO TRADE

System
System Posts: 100,537 🤖 Admin 🤖
edited June 9 in General accounting discussion
Can anyone give me any advice regarding how shareholders funds are treated once the company ceases to trade, presumably the funds are distributed once all debts paid, but then subject to CGT if this is so does this qualify for taper relief or am I way off mark?

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  • System
    System Posts: 100,537 🤖 Admin 🤖
    SHAREHOLDERS FUNDS AFTER CO CEASES TO TRADE

    Taper relief applies subject to conditions of being a trading company etc.<BR><BR>ESC C16 must be applied if there is no formal liquidation or the distribution might be treated as income and the tax payer will loose CGT annual exemption and taper relief.<BR><BR>Whilst not claiming to be an expert, I have dealt with this subject for two clients. If you require further info please contact me.
  • System
    System Posts: 100,537 🤖 Admin 🤖
    SHAREHOLDERS FUNDS AFTER CO CEASES TO TRADE

    You are pretty well correct.<BR><BR>All debts should be paid or due credit given for company debts paid or assumed by shareholders.<BR><BR>The cash and assets left are apportioned to shareholders in proportion to their shareholdings and treated as a capital distribution, the gain is calculated as normal i.e. proceeds less cost less IA, if any, then apply taper relief then Annual Exemption.<BR><BR>

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