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HMRC internal manual

Employment Related Securities Manual

University Spin-outs

Failure of company

Example 7: Plato – spin-out wound up

Sadly, the spin-out from the Republic University (ERSM100110) does not make any progress and the University and Plato decide to wind up the company. Any external funding left goes back to the investor under the terms of their involvement and the IP reverts to the University.

Outcome

Plato’s shares are worth nothing and there is no UK tax liability, whether to income or capital gains.