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Unplanned planning! How to benefit from the unanticipated cessation of trading

By Iain Rankin, September 2020

Iain Rankin looks at some options potentially available to business owners contemplating the cessation of their businesses. 

The Coronavirus pandemic is encouraging some entrepreneurs to bring forward their retirement plans. Business owners should carefully consider a number of potential tax strategies. 

Tax efficient treatment of a company’s retained reserves 

In most cases, when owner-directors wish to close their company, they will find that it is more tax-efficient to extract the company’s reserves via a formal member’s winding-up.Such distributions are normally treated as capital and taxed under the capital gains tax (CGT)regime (TCGA 1992, s 122(5)(b)), at more favourable rates. 

However, a word of caution; this beneficial CGT treatment

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