Corporation Tax Act 2010 section 636

Charge to corporation tax on winding up receipts

Section 636 deals with the corporation tax charge that applies to amounts received during the winding up of a deposit-taking trade, such as a bank or building society.

• Corporation tax on income applies to winding up receipts arising from a deposit-taking trade, but only where those amounts were not already included in the trade's profit calculations before it permanently ceased.
• A winding up receipt is any sum received by the company or its liquidator after the start of winding up proceedings or, if later, after the permanent cessation of the deposit-taking trade.
• Sums received on behalf of a third party who is exclusively entitled to them (i.e. not the company or its liquidator) are excluded from the definition of winding up receipts.
• Amounts realised from the transfer of an asset that was required to be valued under the trading stock cessation rules are also excluded from the definition of winding up receipts.