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Chapter VCM74630

Document Cited authorities 2 Cited in Related
Vincent
Published date09 March 2016
Record NumberVCM74630
CourtHM Revenue & Customs
IssuerHM Revenue & Customs

The meaning of a company being ‘in administration’ or ‘in receivership’ given by ITA07/S252for EIS relief applies also for the purposes of the trading requirement in the context of Share Loss Relief. The terms are defined by reference to the insolvency statutes of the United Kingdom and corresponding statutes of overseas territories. For general guidance on administration or receivership see CTM36105 onwards.

ITA07/S138 provides that, generally, a company is not regarded as ceasing to meet the trading requirement merely because of anything done in consequence of the company or any of its subsidiaries being in administration or receivership.

This only applies if the entry into administration or receivership (or, before 15 September 2003, the making of the relevant order), and everything done as a result of the company itself being in administration or receivership, is for genuine commercial reasons and is not part of a scheme or arrangement the main purpose, or one of the main purposes of which is the avoidance of tax.

The winding up of a company is not the same as its entering into administration or receivership. The general rule is that a company does cease to meet the trading requirement when a resolution is passed or an order is made for the winding up of the company or any of its subsidiaries, or if the company or any of its subsidiaries is dissolved without winding up. However, this general rule does not apply if the winding up is for...

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