CTM36230 - Particular topics: company dissolution: already dissolved
Where a company has been dissolved:
- before assessment, or
- before payment of its tax liabilities, or
- before arrangements as described in CTM36220 can be made,
the shareholders may be prepared voluntarily to account for tax on CTM36220 lines. Failing this, see INS5108.
If all the following conditions are satisfied, you may agree to treat distributions made in circumstances described in CTM36205 as if they had been made in the course of a formal winding up. They are treated as if a formal winding-up commenced 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 then arise on the distributions of assets to shareholders. But, any CGT liability that would arise on such distribution must be paid. (It may not always be in the interest of the company and its members to make this arrangement.) You should make it clear to the company that the arrangement is made on the assumption that the company will be struck off and dissolved. The arrangement may be cancelled, and the full tax charged, if the company is not dissolved (see CTM36240).
The concession is not necessarily refused because not all the conditions are met. Where a company requests concessionary treatment, and the conditions are not all met, submit the case to CT&VAT (Technical).
These arrangements can also apply to a UK resident company established under a foreign jurisdiction if the company is struck off under provisions similar to Section 652 and Section 652A Companies Act 1985. A claim for the concession to apply in these circumstances should also be submitted to CT&VAT (Technical) whether or not all the conditions are met.
The conditions are as below.
1.The company is not one which, if the distributions were made in a winding up, would be reported to the Anti-Avoidance Group (Intelligence), Clearance and Counteraction Team in respect of ICTA88/S703 under sub-paragraphs (e) or (f) of CTM36875.
2. The company is not the subject of an investigation either on its own or as part of an enquiry embracing individuals or other companies.
3.The company satisfies the Inspector that:
(a) it does not intend to trade or carry on business in future, and
(b) it intends to collect its debts, pay off its creditors in full and distribute any balance of its assets to its shareholders (or has already done so), and
(c) it intends to seek or accept striking off and dissolution.
4. The company and its shareholders agree that:
(a) they will supply such information as is necessary to determine, and will pay, any CT liability on income or capital gains and any ACT liability under ICTA88/SCH13 due on distributions made prior to 6 April 1999.
(b) the shareholders will pay any CGT liability (or CT in the case of a corporate shareholder) in respect of any amount distributed to them in cash or otherwise as if the distributions had been made during a winding-up (see CG40430 to CG40432).
