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Under US federal income tax law and, in particular, Section 897 of the Internal Revenue Code of 1986, as amended (the so-called “FIRPTA” rules), gain from the disposition of US real property interests is treated as income effectively connected with the conduct of a US trade or business, and therefore such gain is subject to US federal income tax (the “FIRPTA tax”).A “US real property interest” is broadly defined as a direct interest in real property located in the United States or the Virgin Islands, an interest in a partnership meeting certain US real property interest ownership tests, or an interest in a US corporation that has been a “US real property holding corporation” at any time within the 5-year period ending on the date of the disposition of such interest.
Typically, a company director will have gone through many months of stressful negotiations with HMRC for taxes owed and the bank to try and raise additional funding.
In the UK a company can always be liquidated but there are different procedures involved with insolvent liquidation as opposed to solvent liquidation.
The first thing probably to understand is the difference between being solvent and insolvent, of course.
It should be understood that the only time a company can seek solvent liquidation is if all debts are paid in full when the company seeks a winding up order.
If all debts are paid in full there will be no negative repercussions levied against the directors and/or shareholders.
These transfer taxes can quickly add up to a sizeable tax bill for the seller.