CG64115 - Entrepreneurs’ Relief: shares/securities: liquidation of company

TCGA92/S169S(2) makes it clear that a disposal of an interest in the shares in a company includes a disposal of an interest treated as made by virtue of TCGA92/S122. This treats a capital distribution in respect of shares as a disposal (or part- disposal) of those shares, see CG57825+.

Entrepreneurs’ Relief is available, if the relevant conditions are satisfied, for capital distributions made in respect of shares disposed of as a result of the winding up of a company.

ESC/C16

Extra-statutory concession C16 may be applicable where a company is wound up "informally". If all the relevant conditions for ESC/C16 to apply are satisfied, distributions made in circumstances described in CTM36205 will be treated as if they were capital distributions made in the course of a formal winding-up.

The company is treated as if it had begun a formal winding-up either on the date the company declared its intentions to seek or accept striking off and dissolution, or at an earlier date if the company had then ceased to carry on business and commenced to distribute its assets. Liability under ICTA88/S209 will not arise on distributions to shareholders made on or after the date the informal winding up is treated as beginning. But capital gains may arise on such capital distributions, see CG57825+ and CTM36220.

Entrepreneurs’ Relief may be available in respect of a distribution which is treated as a capital distribution under ESC/C16.