With the economy in poor shape and personal debt still at high levels, the outlook is less than rosy for people who are facing insolvency. Even after the changes made by the Enterprise Act 2002, bankruptcy is still a difficult experience. This is especially true where the family home is the main asset of the bankrupt’s estate.

The trustee in bankruptcy will normally seek a possession order over the property so that it can be sold to satisfy the claims of creditors.

When deciding whether the possession order is to be granted, the court is obliged to consider:

A business you are buying or selling, if reorganised for sale, may be less valuable if you do not avoid tax pitfalls. This note highlights the most common pitfalls, including those related to an insolvency. You can avoid most with planning.

Reorganisations

Many businesses will now be considering transactions involving corporate reorganisations. They might want to take advantage of market conditions to buy or be considering the sale of business units to refocus strategy. Or they might become involved in an insolvency or reconstruction.

A business you are buying or selling, if reorganised for sale, may be less valuable if you do not avoid tax pitfalls. This note highlights the most common pitfalls, including those related to an insolvency. You can avoid most with planning.

Reorganisations

Many businesses will now be considering transactions involving corporate reorganisations. They might want to take advantage of market conditions to buy or be considering the sale of business units to refocus strategy. Or they might become involved in an insolvency or reconstruction.

Section 342A and the further associated provisions within the Insolvency Act 1986 (“the Act”) provide a Trustee in Bankruptcy with the power to apply to seek to recover pension contributions made whether by the bankrupt himself on his own behalf or by another on his behalf.

Before the Court can grant relief it has to be sure that the rights under the pension scheme are the fruits of the complained of contributions and further that the contributions have unfairly prejudiced the individual’s creditors (Section 342A (2)(a) and(b).

The powers available to HMRC to request information or documents from a third party (a Third Party Notice) where it is reasonably required by HMRC for checking the tax position of a taxpayer are generally well known. What is not so well known is the limited opportunities available to a third party who might wish to challenge the terms or scope of a Third Party Notice.

Appointment of receivers in respect of a group entity takes “control” of that entity outside the group for tax purposes, but does this decision have more far reaching consequences?

The First Tier of the Tax Tribunal heard appeals against closure notices issued by HMRC denying claims for group relief by a group of companies, including a company over whose assets a fixed charge receiver (FCR) had been appointed (the Borrower).

On 24 March, HMRC published a summary of responses to the December consultation on Company Distributions, together with details of the Government's position on the issues raised. The December consultation was covered in my 3 February blog.

In The Commissioners for Her Majesty’s Revenue and Customs v Amran Munir and others [2015], the directors and secretary of a company were sentenced by the High Court to a term of imprisonment for contempt of court.

Summary

In Winnington Networks Communications Ltd v HMRC^[1], the Chancery Division Companies Court (Nicholas Le Poidevin QC) refused the taxpayer company's application to have HMRC's winding-up petitions dismissed, as it had failed to provide evidence that it had a real prospect of successfully disputing the debt claimed by HMRC.

Background

The Tribunal has upheld HMRC's decision that a company (Danesmoor Ltd) should not be entitled to recover input VAT incurred on professional fees for a corporate restructuring. HMRC had not allowed the recovery of the input VAT on the grounds that the services were not provided to the company. The appellant argued that the advisors had been engaged and paid for by the company directly in connection with the restructuring and as such the input VAT should be recoverable.