Share capital £5,000

[Katamatin2321]

I been doing a tax review for a owner managed company and noted that the paid up share capital is £5K.

Is this something that I need to bring to the clients attention re Bona Vancatia. The company is not planning to liquidate but it has cash balance in the balance sheet of £31K but no other assets.

Thanks

[Incredulum]

Why do you think this is a likely scenario? Is he planning on ending up in that situation?

Importantly it should probably be paying tax at 28% as a close investment holding company.

[Ray Coman]

Bona vacancia claims will not be made where distributable reserves are less than £4,000. As the share capital is over £4,000, a special resolution to reduce share capital should be made before striking off. If, under CA 2006 a special resolution is passed and a solvency declaration made prior to the reduction in capital, distributions after liquidation will automatically be capital, without the need to rely on ESC C16.