ESC C16 changes
Company owners are set to lose a tax efficient way of closing down companies they no longer need and extracting the profits. Currently they can withdraw any amount of profit and have it taxed at (usually) lower Capital Gains tax rates using the “Extra Statutory Concession C16” method of informal liquidation. The Government have now quietly introduced legislation limiting the amount that can be withdrawn to £25,000. The legislation was passed on 30 January and affects companies from 1 March 2012 onwards. After this date it will be necessary to go through the much more costly route of appointing an official liquidator so anyone hoping to take advantage of the limit-free ESC C16 will have to do so in the next few weeks.
Please speak to your Barnes Roffe contact partner if this affects you.Talk to Barnes Roffe today