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Misplaced spotlight
Key points
- Proceeds from a winding up of a company are chargeable to capital gains tax unless specific conditions apply when income tax will be due.
- Spotlight 47 targets schemes that try to avoid the phoenixism TAAR by selling to a third party.
- Taxpayers may prefer to sell a company with undistributed reserves to be sure of the tax treatment.
- How can the GAAR apply to a company that has been sold rather than placed in liquidation?
- The TAAR applied only to transactions involving a company winding up.
HMRC published Spotlight 47 Attempts to avoid an income tax charge when a company is wound up on 4 February 2019 (tinyurl.com/y826b6lb). Being a slightly late riser that day – it was after all the day after the Super Bowl – I did not see it until I received emails from three people drawing my attention to it.
Having read it I immediately felt that...
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