Distributions to shareholders – ESC C16

As expected ESC C16 is to be put on a statutory basis with effect from 1 March 2012, but capital treatment will only apply to distributions of up to £25,000. Where a company distributes surplus assets to shareholders and is then struck off the register, Extra Statutory Concession ESC C16 treated the distributions as the equivalent of a distribution in a winding up, allowing the distributions to be treated as capital payments, provided the relevant conditions are met.