Transactions in Securities

Transactions in Securities

Transactions in Securities rules apply when you are liquidating your company down with the main purpose being to simply to avoid being taxed at a higher rate. HMRC’s guidance states that a liquidation carried out following a cessation of trade is outside the scope of this avoidance legislation.

If in the future following a liquidation you wish to conduct your business through a limited company, it should be demonstrable that your new company and old company are not in fact carrying on the same business. Examples of how this can be achieved include:

• Having a break in between the old company ceasing to trade and the new company beginning to trade. Tax law states that a break of 2 years, following the last distribution received in the liquidation, is the minimum amount of time required.
• Demonstrating that the new company is working for a completely different client compared to the old company.
• Rebranding the company name / trading name
• Purchase of new equipment to be used in the new projects.

The above information is provided as a guide only. To ensure accurate advice is given tailored to your personal circumstances, you should consult with your tax advisors.