Readers’ forum: Is relief available for company put through liquidation?

My neighbour has asked a question about capital gains tax which is not something I routinely deal with. After retiring from employment he carried on a consultancy business through a personal company owned with his wife.

He has now put it into a formal liquidation which he believes will secure capital gains tax treatment (with business asset disposal relief – BADR) for the undistributed reserves; a simple dissolution would lead to income tax charges as the amount is over £25 000.

My first concern is to check whether this is correct as it seems ‘too easy’. The difference between capital gains tax at 10% and higher rate dividend tax at 33.75% will clearly cover the liquidator’s fees. His question is then whether he would be permitted to do similar work on a pro bono basis or for fees paid directly to a charity of his...