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HMRC internal manual

Company Taxation Manual

HM Revenue & Customs
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Particular topics: company dissolution: distributions


Distributions in anticipation of dissolution under the striking off process (Companies Act 2006/S1000 or S1003) made on or after 1 March 2012 are subject to a statutory rule at CTA10/S1030A introduced by article 16 of The Enactment of Extra-Statutory Concessions Order 2012, SI2012/266.  The conditions are that

  • at the time of the distribution, the company has secured, or intends to secure, payment of debts due to it, and similarly has satisfied, or intends to satisfy, debts due from it, and
  • the amount of the distribution, or total amount of distributions if more than one, does not exceed £25,000.

If the company has not been dissolved after two years have passed from a distribution, or the first condition above has not been satisfied by that time, normal distribution treatment applies.  See CTM36240.

A company incorporated overseas is treated similarly in relation to analogous striking off provisions under the law of the overseas territory.


If all the following conditions are satisfied for distributions that take place before 1 March 2012, those taking place in circumstances described in CTM36205 are treated as if they had been made in the course of a winding-up process commenced on the date the company declared its intention to seek or accept striking off and dissolution, or at an earlier date if the company had then ceased to carry on business and begun to distribute its assets.

CTA10/S1000 (CT distribution treatment) will not then apply to the distribution of assets to shareholders, but any CGT liability that would arise on such distribution must be paid. It may not always be in the interest of the company and its members to make this tax arrangement.  It is, where appropriate, made on the assumption that the company will be struck off and dissolved.  It may be cancelled, and the full tax charged, if this does not happen (see CTM36240).

The concession is not necessarily refused because not all the conditions are met.  Where a company requests concessionary treatment, and the conditions are not all met, submit the case to CTISA (Technical).

These arrangements can also apply to a UK resident company established under a foreign jurisdiction if the company is struck off under provisions similar to CA06/S1000 and S1003 procedures.  A claim for the concession to apply in these circumstances should also be submitted to CTISA (Technical) whether or not all the conditions are met.

Conditions of ESCC16

  1. The company is not one which, if the distributions were made in a winding up, would be reported to the Anti-Avoidance Group, Clearance and Counteraction Team in relation to ITA07/PART13/CHAPTER1 (formerly ICTA88/S703) under sub-paragraphs (e) or (f) of CTM36875.
  2. The company is not the subject of an enquiry either on its own or as part of an enquiry embracing individuals or other companies.
  3. The company satisfies an HMRC officer that:
(a) it does not intend to trade or carry on business in future, and  
(b) it intends to collect its debts, pay off its creditors in full and distribute any balance of its assets to its shareholders (or has already done so), and  
(c) it intends to seek or accept striking off and dissolution.  
    4. The company and its shareholders agree that:

(a) they will supply such information as is necessary to determine, and will pay, any CT liability on income or capital gains, and

b) the shareholders will pay any CGT liability (or CT in the case of a corporate shareholder) in respect of any amount distributed to them in cash or otherwise as if the distributions had been made during a winding-up (see CG40430 to CG40432).