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HMRC declines to give liquidation clearances, but has published its response to such requests.
KEY POINTS
- The new rules on dividend taxation will make capital distributions more attractive.
- Finance Bill 2016 cl 35 targets some company distributions relating to share capital in a winding-up.
- The consultation document gave an example of the situation to be addressed.
- An explanation of the conditions in the new legislation.
- A distribution may continue to be treated as capital if the winding-up is for commercial rather than tax reasons.
Clause 35 of the updated Finance Bill 2016 introduces ITTOIA 2005 s 396B (‘Distributions in a winding-up’). The Explanatory Notes describe the purpose of the new legislation: ‘This clause introduces a new targeted anti-avoidance rule (TAAR) that will apply to certain company distributions in respect of share capital in a winding-up. This TAAR will treat the distribution from a...
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