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Posted Wed, 29 Nov 2023 14:21:39 GMT by
Hello I need to declare the capital distribution from a limited company following a Members Voluntary Liquidation (MVL) which was completed in Oct 2023. During the liquidation process, the company made two capital distributions Distribution 1 in Jan 2023 (to be reported in the tax return for 22/23) Distribution 2 in May 2023 (will be reported in the tax return for 23/24) I will be claiming Business Asset Disposal Relief on both distributions (and they are within the allowance). My questions are as follows: 1. I am using the Capital Gains Worksheet however I am unsure how to answer the question "Type of asset". The following options are available: a. Listed shares and other securities b. Unlisted shares and other securities c. Other Property, assets and gains d. Residential property and carried interest Can someone please confirm which option I should select? I assume b or c, but would be grateful if someone can confirm. 2. My understanding is capital distributions should be reported as part disposals. I have 2 questions on this: a. Where in the SA do I inform HMRC that the capital distribution being reported is a part disposal (I don't see any questions which asks this information). b. Disposal vs part disposal. I'll be claiming BAD relief so tax is 10% on proceeds after allowance. Does this tax relief/rate differ is its a part disposal? Thanks
Posted Thu, 30 Nov 2023 15:45:03 GMT by HMRC Admin 10
The type of asset would need to be other property assets and gains, this is the only section that allows a claim for Business Asset Disposal Relief. There is no specific box to advise of a part disposal, this can be advised in the additional information box.
The fact it is a part disposal would not affect the claim for BADR, what would need to be considered is if the conditions to claim BADR are met at each of the disposal dates.

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