Changes to ESC C16

Extra Statutory Concession  C16 has long been an extremely beneficial and straightforward way to deal with the tax implications of the striking off of a company.

Under the concession, Capital Gains Tax rather than Income tax, is payable and the cost of an expensive liquidation is avoided – as long as conditions are met.

However, a proposed amended law sets out the new condition that any payment at the time of the dissolution will be liable to income tax if it exceeds £4,000.

So  the favourable tax implications of ESC C16 are going to be heavily restricted. If you are conisdering striking off your company to release capital and assets it is better to do it sooner rather than later.

If you are considering potential liquidation of your company please get in touch for a no cost initial discussion.