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Administration is a process intended to rescue a company which is in difficulties, to protect it from creditors, and may last for a short period during which the company will continue to trade – the sale of the company may be an outcome or alternatively a reorganisation of the company with a view to sale. Alternatively a company may be in administration for a longer period of time during which there is likely to be rationalisation in the interests of its longer term rescue. A company may be put into administration either by a court order or in certain circumstances by simple notice but subject to court filing requirements.

The tax implications on an administration are similar to those arising on a liquidation (D6.710) in relation to the computation of profits and losses, the release of debt, and the applicable corporation tax rate. There are however differences in relation to the accounting periods and the beneficial ownership of assets, as follows.