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News - 21 February 2013

Are you aware of Disincorporation Relief?

The government has decided to introduce a relief which will be available for businesses to change legal form from a limited company to self employed, referred to as ‘disincorporation relief’.

This was incorporated in the Finance Bill 2013 and will have effect for disincorporations on and after 1 April 2013 and until 31 March 2018.

Tonmoy Kumar, Manager of the Accounts Department of ABDS comments:
“The relief is designed to remove the capital tax charge on disincorporation. The provisions of the proposed disincorporation relief are designed to relieve the company from tax charges when assets are transferred to the shareholders and also to relieve the shareholders from tax due when they receive those assets from the company.”

The government believes a relief covering the company corporation tax charges will tackle the most significant tax barrier on disincorporation and it is straightforward to deliver. The limit of £100,000 on the qualifying assets would mean that approximately 40% of UK companies will be eligible for this relief, covering the majority of those businesses which might want to disincorporate.

If you need any help and advice for your business on Corporation Tax or you need to keep abreast of changes in legislation and how it could impinge upon your business, contact Lavinia Newman, Stuart Coleman or Tonmoy Kumar to discuss how ABDS can help

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail:

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