SVM107170 | Capital Gains Procedures: Liquidations

When a company goes into liquidation and an interim distribution is made to shareholders, the distribution is treated as a part disposal of the shares for CG purposes. SAV may be asked to consider the value of shares immediately after a distribution, in order that the customer’s allowable costs can be apportioned in accordance with the formula:

A divided by A plus B

Where A is the amount of the distribution and B is the value of the shares immediately after the distribution.

Where details of actual and any further expected distributions are not supplied by the instructing office you may be able to obtain this information from liquidation statements filed at Companies House.

Subject to obtaining sufficient information, the value of the retained interest after a particular distribution may be taken as the total of the subsequent distributions received plus any further amounts expected. The total should in strictness be discounted for delay. However if the parties offer the undiscounted amounts this need not be challenged.

Additional Guidance: SVM150000