Replies to Queries -- 2

Replies to Queries – 2

Winding up unwanted company
This problem arises as a result of several of our one-man band or husband and wife companies ceasing to trade as a result of IR35! It would appear that with regard to the application of Extra-statutory Concession C16 the Inland Revenue is taking a tougher stance than in the past and insisting that any overdrawn director's loan account is repaid in cash before Extra-statutory Concession C16 is considered. In the past we have argued successfully that modest residual fixed asset values are treated as a distribution to the director/shareholder in the course of winding up thus clearing the overdrawn loan account and creating a capital gain. Normally this treatment does not attract tax if below the threshold and arising in a year where no other capital gains exist.
It occurs to us that we could avoid the overdrawn loan...