Then the redress payments amount to a pre-insolvency business income receipt taxable as such under normal accounting rules if the swap was taken out for the purposes of the company’s trade, but the company has since ceased trading, and was subject to formal insolvency action (such as a winding up, administration order or company voluntary arrangement. Any consequential company taxation obligation would constitute a pre-insolvency financial obligation (see Rules 13.12(1)(b) and 13.12(3) Insolvency Rules 1986) recoverable by HMRC because of the distribution of the evidence of financial obligation into the insolvency that is relevant.

Then the receipt will normally be a taxable post-cessation receipt in the hands of the person receiving or entitled to receive the payment if the swap was taken out for the purposes of the company’s trade, but the company has since ceased trading and wasn’t subject to any formal insolvency action.

2.3 What you should do in the event that ongoing business is dissolved additionally the redress re re payment is compensated to at least one of the creditors

The place where an ongoing company was dissolved the post-cessation receipts regime continues to affect any redress payments made. Continua a leggere