Disincorporation Relief

The claim for disincorporation relief has to be jointly claimed by the shareholders and company within two years of the date of transfer. It is best to use the services of a qualified firm of accountants to make your claim for disincorporation relief, as this is the best way to ensure eligibility and to ensure that all forms are correctly completed.

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This form of tax relief enables companies to transfer specific assets to shareholders without a corporation tax charge being levied on the assets’ disposal. Usually, a transfer of assets from a company to its shareholders is treated as occurring at market value for tax purposes. This means that the company may have to pay corporation tax even if its market value is below its original price. Claiming disincorporation relief enables qualifying assets to be transferred below their market value, ensuring no charge for corporation tax for the company.

Qualifying, Transfer and Eligibility

A qualifying transfer must meet the following conditions:

  • The business is being transferred as a going concern
  • It is being transferred together with its assets
  • The qualifying assets’ total market value is not over £100,000
  • The shareholders to whom the business is transferred are individuals.
  • The shareholders have had shares in that company for 12 months before the transfer is carried out.

Companies and their shareholders can claim disincorporation relief if the company is transferring its business to all or some of the shareholders, and it is a qualifying transfer. However, shareholders may still need to pay capital gains tax or income tax on that transfer of assets, and capital gains tax may be payable if the assets are disposed of later.

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Are you just looking for an answer to a general question? We always provide free advice to individuals and self employed persons. You can send us an email, call us or fill in the form. But you should be asking answers to general questions.

Types of Corporation Tax

Its rather types of organisations which need to pay corporation tax. Companies can also be classified as non resident or foreign.

Unincorporated Business

Unincorporated Business are associations registered in companies house. Other types of business will include sole traders and partnerships.

Reliefs And Allowances

Claim corporation tax releif on expenses which are eligible under the law. There are penalties for claiming wrong tax relief.

Tax on Foreign Companies

Corporation Tax on foreign companies will depend on certain conditions. Its not always every foreign company have to pay tax.

Frequently Asked Questions

Most frequent questions and answers

No we do not charge any fee for initial consultation. We will try to give you free guidance if its something you can do easily by yourself. We will only charge you if you appoint us to do some work for you. 

We are giving free advice on general questions and this is one way of paying back to our local community who cannot get through to tax man. But if your question is of specific nature, we will tell you about our fee.

You can certainly ask question about accounting but you should know that we cannot teach you accounting over the phone or online. If you are not familiar with book keeping or accounting, its best to hire an accountant?

If you are only after advice, we will make a decision after hearing question. It may take further investigation and we may have to look into your personal circumstances to answer your question.

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