From 6 April 2016, a Targeted Anti-Avoidance Rule (TAAR) specifically targets the practice of 'phoenixing' a company to avoid tax.

• Phoenixing describes closing down a company and then continuing to be involved with a similar trade whether carried on by you or by connected parties.
• This practice of closing down the company by liquidation but carrying on the trade elsewhere can be used as a way of extracting funds as capital.
• It may also be used for non-tax reasons i.e. as a way of avoiding creditors or to restart an existing trade via a 'clean' company if the old one had reputational issues etc.

The TAAR must be considered each time a distribution is made during the winding-up process.

• The TAAR is a stand-alone test. You also must consider the wider Transactions in Securities rules these also apply to striking off.