The OTS has published a short focus paper on the future of disincorporation relief. To-date, the relief has attracted just 50 claims.

The paper draws attention to the potential for the relief to fall by the wayside unless action is taken, as at present it will cease to apply from 1 April 2018, and to stimulate debate about whether it is achieving its purpose.

Disincorporation relief was introduced by the 2013 Finance Act and applies to disincorporations undertaken between 1 April 2013 and 31 March 2018. 

If a company's shareholders want to transfer its business into sole tradership or a partnership business there will normally be a capital disposal of the company's assets of land and goodwill. This relief is designed to remove that tax charge.

The relief suffers from having a very low limit: it only applies if gains on land and property and goodwill have a market value of £100,000 or less.

Useful guides and links

Disincorporation Relief (freeview)

Disincorporation Relief Masterclass
Step by step guide on how to use this relief

External links

OTS: Disincorporation Relief focus paper


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