Disincorporation relief set to expire

1 min read

Businesses will no longer be able to claim dis-incorporation relief from 31 March 2018.

The relief is being withdrawn after fewer than 50 businesses attempted to access the scheme 3 years after its launch, despite more than 610,000 UK businesses being eligible.

Dis-incorporation relief was introduced in April 2013 with the aim of reducing tax barriers faced by small businesses when downsizing from a limited company to a sole trader or partnership. It was introduced with a ‘sunset’ clause that limited it to a 5-year period, allowing the government to review its effectiveness and choose whether to continue it.

The relief allowed businesses to transfer assets, such as land, buildings and goodwill, worth less than £100,000 to shareholders without being charged corporation tax. However, the scheme only benefited companies as it offered no relief for shareholders, who instead faced taxation on any distribution they received.

As a result of the low take-up, it was announced in November 2017 that dis-incorporation relief would not be extended beyond its March 2018 expiry date.

Speak to us about your business structure.

You might be interested in...

  1. TC Group Insights

    08 Apr 2026

    UK Umbrella Company Legislation Changes Proposed for April 2026

    Changes to UK umbrella company legislation from April 2026. Understand the impact of joint and several liability on your business and how to prepare with the right due diligence and risk controls.

    Learn more

    UK Umbrella Company Legislation Changes Proposed for April 2026

  4. 07 Apr 2026

    Why Do FCA-Regulated Firms Need More Than Basic Accounting?

    For FCA-regulated firms, financial compliance is more than keeping accurate books or meeting year-end deadlines. Regulation brings an added layer of scrutiny, responsibility, and risk.

    Learn more

    Why Do FCA-Regulated Firms Need More Than Basic Accounting?