Consequently, new stricter rules are being introduced to apply to transactions on or after 6 April 2016.
For the new anti-avoidance rules to apply, the company being wound up must firstly be a close company and the individual must have held at least a 5% interest in the company (ordinary share capital and voting rights).
If your company is insolvent then this means that the company is struggling to pay their invoices as and when they fall due and their liabilities far outweigh their assets.
Depending on which scenario your company is in will determine which liquidation process is most suitable for you when deciding on how to close down your company.
What are most noteworthy advantages of sequestration?
This question furthermore usually follows “What are the disadvantages of sequestration?
This may result in payments following some company liquidations being taxed as dividends instead of capital gains.