Corporation Tax Act 2010 section 440

Basis of winding up under section 439(3)

Section 440 explains how to calculate each person's share of a company's assets in a notional (hypothetical) winding up, for the purpose of determining whether a company is a close company under section 439(3).

• A person's share of the assets in a notional winding up includes anything they would receive directly if the company were actually wound up.
• Where another company is a participator in the relevant company, that other company is also notionally wound up, and its share of the relevant company's assets is treated as distributed among its own participators in proportion to their entitlements.
• This notional winding-up process is applied repeatedly down through any chain of corporate participators until the assets are traced to their ultimate individual or non-corporate recipients.
• At each stage in the chain, references to "the relevant company" are read as referring to whichever company is being notionally wound up at that point.