Struggling businesses ― closing the company down

Produced by a Tolley Owner-Managed Businesses expert

Owner-Managed Businesses

Guidance

In these current very difficult times, some businesses will unfortunately struggle and ultimately fail. This guidance note details some of the key issues that may need to be considered to ensure the most tax efficient and commercially sensible solution is achieved.

Tax efficient winding-up / liquidation

Company administration aims to help the company repay debts in order to escape insolvency (if possible), whereas liquidation / winding-up is the process of selling all assets before dissolving the company completely. Although the decision as to whether to enter administration and possibly ultimately wind-up the business is primarily a commercial one, there are various tax implications (direct and indirect) that should be discussed with your client, as detailed below.

Direct tax implications

The primary direct tax consequences that need to be considered when a client is entering administration, and possibly ultimately winding-up, centre primarily around compliance issues, group relations and planning on an ultimate winding-up. Issues that should be discussed with your client include:

•
the effect on accounting periods ― the appointment of an administrator causes

Continue reading the full document

To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™

TAKE A FREE TRIAL NOW

Popular Articles

Corporation Tax

Associated companies ― from 1 April 2023

Associated companies ― from 1 April 2023Implications of associated companiesFrom 1 April 2023, the rate of corporation tax that a company is subject to depends on the level of its augmented profits. The rate of tax is based on a comparison of the company’s augmented profits against the corporation

22 Mar 2021 10:21 | Produced by Tolley Read more

Trusts and Inheritance Tax

Tax on UK resident beneficiaries of non-resident trusts ― overview

Tax on UK resident beneficiaries of non-resident trusts ― overviewIntroductionUK resident beneficiaries of non-resident trusts are subject to UK tax on payments or benefits received from the trust. They are liable for income tax on income distributions from the trust and they may also be liable to

14 Jul 2020 13:47 | Produced by Tolley Read more

Autumn Budget 2024

Personal Tax

Enterprise management incentive schemes

Enterprise management incentive schemesWhat is an enterprise management incentive (EMI) scheme?The enterprise management incentive (EMI) scheme is a tax-advantaged share option employee incentive scheme aimed at small entrepreneurial companies that meet certain conditions. It is designed to assist

14 Jul 2020 11:36 | Produced by Tolley Read more

��Ƶ