Corporation Tax Act 2010 section 1030A

Distributions in respect of share capital prior to dissolution of company

Section 1030A provides that certain small distributions made by a company in anticipation of being struck off the register may be treated as not being distributions for corporation tax purposes, provided specific conditions are met.

• When a company is being struck off (whether initiated by the registrar or on the company's own application) and makes a distribution of share capital before dissolution, that distribution may fall outside the corporation tax rules on distributions.
• Two conditions must both be satisfied: Condition A requires that the company has collected (or intends to collect) all sums owed to it and has settled (or intends to settle) all its debts and liabilities at the time of the distribution.
• Condition B requires that the total of all such distributions does not exceed £25,000; if more than one distribution is made in anticipation of dissolution, the aggregate of all of them must remain within this limit.
• The same treatment applies to companies incorporated outside the United Kingdom, where equivalent overseas striking-off procedures are used in place of the Companies Act 2006 provisions.