Liquidating a company to avoid tax miss ireland dating a nigerian
Shareholders are normally entitled to the surplus that remains after a company has paid off its creditors and discharged all of its outstanding liabilities in the winding up process.
Shareholders that receive distributions of surplus assets in the winding up of Australian companies may be liable to taxation under either the deemed dividends or capital gains tax provisions.
See also: A going concern is a business that is operating and making a profit.
No GST is payable on the sale of a going concern if certain conditions are met.
In certain situations, the character of these amounts does not 'wash out' in the course of liquidation distributions as it would if made prior to liquidation.
For example, a pre-capital gains tax (CGT) capital gain in the hands of the company may retain its tax exempt status when distributed by a liquidator, but may lose its exempt status if distributed prior to liquidation.
Under certain circumstances, pre-CGT shares in a company and/or trust may become subject to CGT.
Also, the rules are designed to ensure that a trustee cannot shelter trust income at the prevailing company tax rate by creating a present entitlement to an amount of net income in favour of a private company without paying it, and then distributing the underlying cash to a shareholder (or their associate) of the company.