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Time may now be running out to wind up or partially exit a business tax efficiently

If you are looking to close a business and extract any accumulated value or dispose of part of your business, you may wish to expedite the process.

New tax legislation (in draft but expected to take effect later this year – possibly from 5 April if not earlier) could mean tax being payable at over 38% rather than 10% in some cases.

In a winding up situation the new rules aim to discourage ‘phoenixing’ and ‘moneyboxing’ i.e. serial businesses and those with substantial cash or investment assets.

Realistically, unless distributions on a winding up are made before the law changes, probably 5 April 2016, there may be adverse tax implications for the shareholders.

The other areas where problems are anticipated are Management Buy Outs or reductions in capital where the current owners retain a stake in the business.  For more detail on how the new proposed legislation might affect you and how we can help please contact Cathy Corns 01908 605552 cathycorns@mercerhole.co.uk

 

 

Date: 14th January, 2016
Author: Cathy Corns

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