government

Withdrawal of Extra-Statutory Concession C16 (ESC 16)

03/19/12

The Government has introduced new legislation into the Corporation Tax Acts covering Extra-Statutory Concession C16 (ESC C16) which took effect on 1 March 2012.

Previously, with the prior consent of HMRC, distributions to shareholders as part of an informal winding-up prior to a company being struck off the Companies Register, were taxed as a capital receipt. The new Order [1] caps the limit of total distributions which can be treated as such at £25,000.

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Pre-packs endorsed by the Government

01/26/12

After examining the use of pre-packs as an insolvency tool, the government has abandoned the idea of legislating to give notice to creditors in all pre-packs and concluded that:

"Pre-pack sales can offer a flexible and speedy means of business rescue and when used appropriately can be the best way of maximising returns for creditors."

The challenge that the Minister has laid down to insolvency regulators is to ensure that pre-packs are used "appropriately".

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