| Commentary

172 Hive downs

| Commentary

172 Hive downs

If a receiver decides to sell the business as a going concern but believes that the company will be wound up before this can be done, the business could be hived down into a wholly owned subsidiary at market value1. The potential tax disadvantages of doing so are largely avoided by the Corporation Tax Act 20102. However, although receivers can contract out of personal liability, once the company is in liquidation, third parties may hesitate to sign contracts under which only they are liable (as will be the case because the administrative receiver’s

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