Admin

Question 1

Only companies in X are able to do tax planning in X

Answer 1

Voluntary liquidation

the pre liquidation period

Question 2

When a company goes into administration, the accounting period ends

Answer 2

the day before but the tax period continues

Question 3

Pre and post liquidation distributions

Answer 3

If income is paid to shareholders pre liquidation it can be paid as dividends, if it is after, it must be treated as capital

Question 4

Under limited circumstances, distributions can be made in the anticipation of striking off a company

Answer 4

These must be capital and the condfitions for these treatments to apply are:

At the time of the distribution the company must intend to secure payment of any sums due to it and satisfy creditors.

The amount cannot exceed £25,000

The company must be disolved within 2 years of making the distribution

Question 5

Post liquidation distributions to corporate shareholders

Answer 5

Will be taxable unless SSE applies

Question 6

The repurchase of shares from

A Company

An individual

Answer 6

Is treated as a capital disposal

Is treated as wither a distribution or a capital disposal

Question 7

Purchase of own shares - Capital treatment

Answer 7

The repurchase must be treated as capital if all of these conditions are met:
The company repurchasing is unquoted
The repurchase must benefit the trade (death, disruptive, investor withdrawing)
Vendor must be UK resident at date of repurchase
Vendor must have held shares for either 5 years or 3 if inherited
Vendor must reduce interests by at least 25%
Vendor must be unconnected after the repurchase (less than 30%)