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HMRC internal manual

Company Taxation Manual

Close companies: close investment holding companies: liquidation

CTA2010/S34 (5) (formerly ICTA88/S13A (4))

Where a close company commences liquidation, CTA2010/S34 (5) (formerly ICTA88/S13A (4)) provides that it is not to be treated as a close investment-holding company (CIC) in the accounting period immediately following the commencement of winding-up if it was not a CIC in the accounting period immediately before liquidation commenced. In any subsequent accounting period a close company in liquidation will be excluded from being a CIC only if it then meets the usual conditions of Section 34 (2) - see CTM60710.

It may happen that there is a very short gap between the end of a period in which the company was not a CIC and the commencement of winding-up, so that strictly the company will not have the benefit of Section 34 (5). This may cause difficulties in some cases and an undertaking has been given to review the position where a company has not been able to avoid a short gap and would suffer significantly if not given the protection of Section 34 (5).

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)