Finance Bill 2016 includes provisions designed to prevent taxpayers converting profits generated in a company into a capital receipt in the hands of the shareholder(s). Taxpayers may want to consider winding-up their companies or making substantial dividend distributions ahead of 6 April 2016 as a result of these measures and the changes to the taxation of dividends.

Broadly, the intention is that a capital distribution made in the winding-up of a company will be taxed as income if:

Since Retail Acquisitions acquired BHS it has been rationalising its stores as well as other measures in order to turn its fortunes around. However that may not be enough because it believes it is paying considerably more than the market rate on some of its premises.

In order to implement overhead reductions, it may prepare proposals for a CVA, to reduce its rental liability, and perhaps its overall position with creditors, depending on how the restructure is planned.

It was anticipated that more radical thoughts would emerge from Lord Justice Jackson’s latest speech last night to the Insolvency Practitioners’ Association on the subject of rolling out more fixed costs, and so it proved.

In Sharma v Top Brands Ltd [2015] EWCA Civ 1140, the Court of Appeal refused to allow a former liquidator of a company (which was a vehicle for VAT fraud) to rely on the illegality defence to avoid liability for a claim brought against her for breach of duty under section 212 of the Insolvency Act 1986 (IA 1986).

Background

This article takes a look at the considerations laid down in Re Sahaviriya Steel Industries UKLimited [2015] EWHC 2726 when the court is asked to make a validation against anticipated payments – what guidance can be extracted?

As reported in Reed Smith’s March 2015 client alert, insolvency practitioners currently enjoy an exemption from the provisions of Part 2 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO).

The past two months have seen a further plethora of regulatory and legislative changes. We sum up some of the more significant ones.

Pre-pack pool open for business

The last two months have seen two key appeals in which the court was required to decide whether the tenant of a particular type of building should enjoy the statutory right to acquire the freehold of a house. This right is enshrined in the Leasehold Reform Act 1967.

The properties, and the questions for the court in each case, were quite different. What the judgments had in common was a purposive approach to interpretation of the Act.

In 2013 as part of the so called “Jackson reforms” to civil litigation, the ability to recover Conditional Fee Arrangement (“CFA”) success fees and After The Event (“ATE”) insurance premiums from other parties in litigation was removed. Insolvency practitioners bringing claims on behalf of insolvent companies were exempt from the application of these new provisions; however the Ministry of Justice announced in December 2015 that the exemption would be lifted in April 2016.

With the cyclical fluctuation in oil and gas commodity prices, the UKCS has had its fair share of E&P companies going insolvent. As the UKCS matures, the profile of companies that invest in the region is changing. Many smaller parties, potentially with less access to capital, are now building positions.  The commercial exposure is that some companies will not be able to meet cash calls, creating headaches for their co-venturers.