Reply to: Striking off/Dissolving a company

[Ruprect]

How do you work out which is your personal tax office?

Isn't that on your P60?

[level]

How do you work out which is your personal tax office?

[boredsenseless]

Unlikely you can do this because a dividend is paid "per share" -- so if you have 2 shares, each will be allocated a dividend amount and paid to you. However, it's simpler to pay yourself (in total) up to the limit you want (e.g. below the 40% tax bracket) and leave the rest in the company.

I'd advise getting an accountant though rather than trying to learn like this along the way.

What you said is fine, so long as you pay two 1/4 shares on april 5th and two 1/4 shares on april 6th.

However in reality I'd leave a gap between the payments as you'll look a bit of a t@sser if asked the business reason as to why the accounts are stuctured like that in an investigation

[ChimpMaster]

Have read through this forum - I have a question, if anyone can help :

In a 2 share company, both owned by myself, is it possible to take out half the balance of cash on April 5 and the other on April 6 so as to minimise the capital gains tax. I will be able to use 2 tax years allowance instead of one.

Thanks.

Unlikely you can do this because a dividend is paid "per share" -- so if you have 2 shares, each will be allocated a dividend amount and paid to you. However, it's simpler to pay yourself (in total) up to the limit you want (e.g. below the 40% tax bracket) and leave the rest in the company.

I'd advise getting an accountant though rather than trying to learn like this along the way.

[ASB]

Try looking here:-

http://forums.contractoruk.com/thread5502.html

[Blade Runner]

Closing down a company

Have read through this forum - I have a question, if anyone can help :

In a 2 share company, both owned by myself, is it possible to take out half the balance of cash on April 5 and the other on April 6 so as to minimise the capital gains tax. I will be able to use 2 tax years allowance instead of one.

Thanks.

[Paul Paranoia]

Thanks for the info 'nobody here'.

[nobody here but us chicke]

esc c16

Paul

I dont know that I wont have a problem until I know that they have accepted my personal tax return and i am past the time for being investigated.

BUT - I went into my personal tax office and went through it with them. They agreed that the business taper would apply (I had £30K in the business). they further agreed that it would be ok to reallocate the shareholding between myself and my wife (original shareholding was 99:1) to 50:50 to allow use of 2 lots of cgt allowance.

Confusion may arise because esc c16 is only available as I understand it to trading companies, but in this context that means trading companies as opposed to investment companies. There was a ruling that a trading co which has ceased trading does not automatically become an investment company. Sorry cant remember the details - try asking on accountingweb. That makes sense because otherwise there would be a loophole allowing an easy conversion of income to capital gain. This is a concession for people retiring.

I did everything myself. My guess is that the number Zeit quoted that he didnt know is the companies Corp. Tax reference.

Search the ir website for ir1.pdf, it has all the details in section c.16 (surprise)

C

[Paul Paranoia]

Complications

Did you recieve full Business Asset Taper Relief on the money you withdrew from the company? From what I've read, there may be complications if the capital distribution was paid out after the company had ceased trading.

[zeitghost]

Once you have the approval of the IR, you can empty the company bank account, "take" whatever other assets exist (like pc, desk, etc).

Close the company account.

Send form 652a to Companies House with a cheque (it was £10 then) and lo! eventually you won't have a company any more.

Hope that helps.

[zeitghost]

To which the reply was:

Inland Revenue
West Wales Compliance
Ty Nant
etc

Mr Zeit. Ghost
Managing Director,
Blah de Blah Ltd.
Company's reg address.


Date: xx/xx/xx
Our Ref: xxx/x/xxxxx xxxxx/xxx/xxx (which contains that number above that I don't recognize...)

Dear Mr Ghost,

Blah de Blah Ltd.

I refer to your letter dated xx/xx/xx the content of which is noted.

In view of the undertakings and declarations contained in your letter of xx/xx/xx I am able to confirm that I have no objection to the provisions of Extra Statutory Concession C.16 being operated in this case and the company being struck off form the record accordingly.

Yours Sincerely,


A. N. Droid.
CT Coordinator.

[zeitghost]

Letter the Second - this one went to the normal IR office dealing with the company.

Company Reg Office address as header.

Date

Inland Revenue
West Wales Area
Ty Nant
180 High Street
Swansea
SA1 5AP

Dear Sirs,

Re: Blah de Blah Ltd. - xxx xxxxx xxxxx (I don't recognize this number by the way).

The above company has now ceased trading and has recently submitted final accounts for the period to xx/xx/xx

It is intended to dissolve the company under Section 652, Companies Act 1985 and seek approval that the distribution to shareholders are covered by section 209(1), ICTA 1988.

I can assure the company:

1. does not intend to trade or carry on business in the future; and
2. intends to collect its debts, pay off its creditors and distribute any balance of its assets to its shareholders; and
3. intends to seek striking off and dissolution.

The company and its shareholders agree that

1. they will supply such informatin as is necessary to determine, and will pay, any Corporation Tax liability on income or capital gains, any ACT liability on distributions under Schedule 13 ICTA 1988; and

2. the shareholders will pay any Capital Gains Tax liability in respect of any amount distributed to them in cash or otherwise as if the distributions had been made during a winding-up.

Please contact the company's accountant below should you have any questions.

Nxxxxx Wxxxxxs, etc.

Yours Faithfully,

etc.

[zeitghost]

Letter the First

Company's Registered Address as Header

Date

Inland Revenue
Swansea SVC
Tremains House
Tremains Business Park
Tremains Road
Bridgend
CF3 1TZ

Dear Sirs,

Re: Blah de Blah Ltd. - xxx/xxxxx

Please note that the above company has now ceased trading and will shortly be applying for the company to be dissolved (under Section 652) at Companies House.

The Company ceased trading on xx/xx/xx

Final accounts were prepared for the period to xx/xx/xx

Please issue the final P35 so that this may be completed.

Please contact the company's accountant below should you require any information.

Nxxxx Wxxxxxxs Ltd, etc.

Yours Faithfully


xxxxx x xxxxxx

[nobody here but us chicke]

this was accepted.

Further to our telephone conversation today, we wish to apply for extra statuary concession C.16 for the closure of XXXXXXXXXX Limited.

The company has ceased to trade and there is no intention to resume trading. We have cancelled our VAT registration.

We have collected all debts owed to the company and intend to pay off all creditors and distribute the residue of the company assets to the shareholders.

We intend to seek a formal striking off and dissolution of the company.

The company shall submit final corporation tax returns and the company and shareholders will provide information necessary for the calculation of corporation tax. We shall of course pay any corporation tax due.

The shareholders will then pay any capital gains tax due as a result of this distribution.

I believe that this satisfies the requirements for ESC C.16. Could you please confirm that this is acceptable to the Inland Revenue and that the concession will be granted?

May I take this opportunity to wish yourself and the other CT staff a Happy Christmas.


-------------------------------

Rang them up and asked what I needed to do - answer - write in to make the application with the undertakings required (from ir1.pdf) Had to submit the final ct return and accounts.

obviously the xmas reference is optional.

[krash]

I'm risking being told to "find you own accountant!!!" - but you wouldn't want to quote any parts of those letters would you?