Until now the shareholders in such firms have enjoyed a special arrangement under which they have paid only CGT on the proceeds instead of income tax.
This ‘concession’ is now being put on a statutory basis, but there will be a £25,000 ceiling on the amount subject to CGT. Sums above this will be subject to income tax at the shareholder’s top rate.
It is possible to avoid this tax only by paying for a formal winding-up by an insolvency practitioner or other professional, which the Revenue says could cost £7,500 for a small business whose affairs are not complicated.
This ‘concession’ is now being put on a statutory basis, but there will be a £25,000 ceiling on the amount subject to CGT. Sums above this will be subject to income tax at the shareholder’s top rate.
It is possible to avoid this tax only by paying for a formal winding-up by an insolvency practitioner or other professional, which the Revenue says could cost £7,500 for a small business whose affairs are not complicated.
Will this effect contractors when closing their ltd companies?
Will ltd contractors being able to negotiate a much lower fee than £7500..
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