Disincorporation is the transfer of a business’s assets from a limited company to its shareholders who continue the business as a sole trader or a partnership. Such a transfer of assets would normally be subject to corporation tax on disposal of the assets by the company, but HMRC is offering tax relief to qualifying businesses, known as Disincorporation Relief.
To receive disincorporation relief the following the following criteria must be met:
- total value of qualifying assets doesn’t exceed £100,000
- the business is transferred as a going concern
- the transfer includes all assets of the business (except cash)
- recipient shareholders are individuals, partnerships are not LLPs, and shareholders have held their shares for at least a year prior to the transfer date
- the disincorporation takes place between 1 April 2013 and 31 March 2018
- a claim for Disincorporation Relief is made within 2 years of the date of the transfer
How can London Registrars help?
London Registrars can manage your disincorporation including the application for the tax relief, allowing you to focus on running your business. As part of our disincorporation service we will:
- check that your business and the recipient shareholders qualify for tax relief
- provide information in relation to having business assets valued
- prepare your claim for Disincorporation Relief
- file the relevant form with Companies House to have the limited company struck off once the transfer is complete
For more information about our disincorporation service and a quote please contact us.