When a company goes into liquidation and an interim distribution is made to shareholders, the distribution is treated as a part disposal of the shares for CGT purposes. The tax office may ask SAV to consider the value of shares immediately after a distribution, in order that the Inspector can apportion the taxpayer’s allowable costs in accordance with the formula
| A |
|
A+B |
where A is the amount of the distribution and B is the value of
the shares immediately after the distribution.
Where details of actual and any further expected
distributions are not supplied by the Inspector you may be able to
obtain this information from liquidation statements filed at
Companies House.
Subject to obtaining sufficient information, the value of
the retained interest after a particular distribution may be taken
as the total of the subsequent distributions received plus any
further amounts expected. The total should in strictness be
discounted for delay. However if the parties offer the undiscounted
amounts this need not be challenged.
| Additional Guidance: SVM150000 |
