Phoenix fright: tax risks for distributions and company liquidations

A move to counter tax-driven phoenix practices creates uncertainty for legitimate company liquidations. Peter Rayney FCA CTA considers the options to avoid HMRC’s so-called ‘unacceptable arrangements’

Owner managers generally expect liquidation distributions to fall within the capital gains tax (CGT) regime. The clear statutory rule in s1030, Corporation Tax Act 2010 (CTA 2010) stipulates that distributions received during the course of a winding-up do not count as income distributions.

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