In certain circumstances, it may be appropriate to wind up a solvent company. This is done by a Member’s Voluntary Liquidation which will be initiated by the directors but is done through shareholder approval.
This method of asset realisation and distribution to shareholders is tax advantageous as distributions fall under the Capital Gains Tax Rules and are not treated as income. Sometimes companies need to restructure and again an MVL is used to separate assets without tax implications.
We work with your tax advisors in order to achieve the best outcome for your given situation.
We were instructed to deal with the MVL in respect of a demerger. The company had been incorporated for over 50 years. The founding director and shareholder was retiring and passing on his interests to his sons. Tax advice had been obtained and S110 reconstruction was the route to be followed. We facilitated the reconstruction through the MVL splitting the company’s assets between the two businesses it ran each business transferring to a new company. The reconstruction was free of any tax implications for any of the shareholders.
End of Business
A contractor had been working through a limited company for some 10 years. He was offered a full time position and had decided to accept. There was no longer any requirement for the limited company. Final accounts were drafted and the company placed into MVL. The reserves of £450,000 were distributed as capital saving over £150,000 in tax.