Disincorporation

Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance

Disincorporation

Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance
imgtext

Tax consequences of disincorporation

There are potentially some unfortunate tax consequences of disincorporation depending on the assets held by the company and the proprietor’s own position. It is important that tax advice should be sought in advance.

Disincorporation of a company and transferring the trade to the proprietor’s sole trade has the following tax effects:

  1. chargeable assets (which usually includes goodwill at market value) which are transferred will be deemed to be transferred at market value as the trader is connected with the company, see the Connected party disposals guidance note. It may be necessary

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
Powered by Tolley+

Popular Articles

Taxation of dividend income

Taxation of dividend incomeIntroductionA dividend is a distribution of profit by a company to its shareholders.A dividend is not only a payment in cash. It can be the issue of new shares in exchange for forfeiting the right to a cash payment (a stock dividend). For more detail, see the Cash

14 Jul 2020 13:48 | Produced by Tolley Read more Read more

Definition of a close company

Definition of a close companyThe detailed definition of a close company is set out below, but in summary the rules are targeted at those companies where the owners can manipulate the activities of the company to influence their own tax position. Therefore, broadly speaking, in most cases an

14 Jul 2020 11:24 | Produced by Tolley Read more Read more

Relief for employee share schemes

Relief for employee share schemesRemuneration expenses are generally deductible for corporation tax purposes as they are considered to be incurred wholly and exclusively for the purposes of the trade. However, expenses relating to shares are usually classed as capital and are therefore not

14 Jul 2020 13:21 | Produced by Tolley Read more Read more