ATXP6 UK
Syllabus A4. Corporation Tax A4b. The scope of CT

A4biii. Accounting periods on winding up

Syllabus A4biii)

Identify and evaluate the significance of accounting periods on administration or winding up

Winding up of a company

Liquidation

If a company decided to wind up, this does not mean that the company has gone bankrupt, the company just wants to cease trading. 

There must be a separate corporation tax computation from the date of commencement of winding up until the winding up as finished.

The date of commencement of winding up is the day that a liquidator is appointed to carry out the liquidation.

On this date, one CAP will end and the CAP of winding up will begin, and continue until the winding up has finished. 

It is very important to differentiate the penultimate and final CAPs.

Illustration

Jake Ltd. normally prepares accounts to 30/06. 

It commenced winding up and appointed a liquidator on 01/01/19.

Winding up was completed on 31/03/19.

What will the accounting periods be?

  • Solution

    The penultimate CAP will be from 01/07/2018-31/12/18.

    The final CAP will be from 01/01/19-31/03/19.