HM Treasury is seeking views on an Office of Tax Simplification proposal for relief against tax charges arising on the disincorporation of a business.
The OTS found that the owners of ‘a number of the smallest companies’ would like to change the legal form of the business from a limited company to self employment. ‘The current tax system mitigates against this, so the OTS has proposed the introduction of a tax relief so that companies can disincorporate without incurring significant tax cost,’ it said. ‘This would parallel the existing incorporation relief.’
The Treasury has invited comments by 30 August 2012. The focus of the consultation is on ‘the transition between legal forms and whether there is an overall demand among small businesses to disincorporate that might be supported by a disincorporation relief’.
HM Treasury is seeking views on an Office of Tax Simplification proposal for relief against tax charges arising on the disincorporation of a business.
The OTS found that the owners of ‘a number of the smallest companies’ would like to change the legal form of the business from a limited company to self employment. ‘The current tax system mitigates against this, so the OTS has proposed the introduction of a tax relief so that companies can disincorporate without incurring significant tax cost,’ it said. ‘This would parallel the existing incorporation relief.’
The Treasury has invited comments by 30 August 2012. The focus of the consultation is on ‘the transition between legal forms and whether there is an overall demand among small businesses to disincorporate that might be supported by a disincorporation relief’.
