Ken Moody muses on recent advice given on the application of anti-avoidance rules to distributions in winding up and wonders, several years since its introduction, how often it is applied in practice.
Many readers will no doubt remember the ‘good old days’ when you could wind up a company, pay capital gains tax at only 10% on distributions from the liquidator (with the benefit of entrepreneurs’ relief) and then, if you wished and if practicable, you could start up a similar business in a new company – now known as ‘phoenixism’. As a (doubtful) bonus, until 2016, a winding up was not specifically a transaction in securities (TIS).
Stopping the ‘phoenix’…
Certainly, intended as a ‘spanner in the works’ of tax-motivated winding-up is ITTOIA 2005, s 396B (introduced by FA 2016), along with changes to the