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MARK MCLAUGHLIN looks at the legislation to supersede ESC C16 and asks why the concession's scope is being restricted
KEY POINTS
- ESC C16 is being replaced.
- New £4 000 limit.
- Effect on entrepreneurs’ relief entitlement.
- Anti-avoidance rule could be an alternative.
- Small and micro businesses.
HMRC are never short of surprises. Unfortunately few of them are of the pleasant variety. The consultation document ‘Extra statutory concessions – fourth technical consultation on draft legislation’ was issued on 13 December 2010. The consultation period ended on 7 March 2011. One of the concessions dealt with in this document was extra statutory concession (ESC) C16.
The purpose of ESC C16 (the text of which is reproduced in ESC C16) and the reason why it is being replaced by legislation were explained in my articles Don’t wind me up! and No ESCape.
In broad terms it allows distributions to shareholders...
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