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Where Taxpayers and Advisers Meet

Income or capital (ESC C16-type issues)

Incredulum
Posts:2795
Joined:Thu Dec 03, 2009 5:35 pm
Income or capital (ESC C16-type issues)

Postby Incredulum » Tue Apr 19, 2016 12:48 pm

Two individuals have a jointly-owned former personal service company containing reserves and cash of £30k. A £5k tax-free income distribution each, followed by capital treatment on the remaining £10k each - covered by the annual allowance - would allow this to happen tax free.

BUT, would the income distribution be treated as being made in anticipation of winding up and thus become capital? Outside my experience zone, all comments greatly appreciated.

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