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We have been approached by a new client who with his wife owned a property company that owned just one property.
The couple had £278 000 of share capital divided equally between them.
In January 2020 the property was sold and after the payment of corporation tax the company was left with £400 000 in the bank.
Unfortunately my client was unaware that he could not just wind up a company with more than £25 000 in assets under the capital gains tax rules.
In March 2020 the couple withdrew all the money from the bank and the registrar of companies was requested to strike off the company in September 2020. This would obviously be problematic if the £400 000 was treated as a distribution.
My suggestion is to treat the withdrawal as a directors’ loan account have the company reinstated and then arrange...
