Closing your company - tax efficiently
Decided to stop using a limited company? Or retiring? Or returning to permanent work? Then you can close your company in a very tax efficient manner.
Closing your company using a Members Voluntary Liquidation (MVL) could be the most efficient option for you:
- Extract the reserved funds of the business in cash.
- Pay only 10% tax and also use CGT allowances.
- Very quick - can be completed within weeks.
Criteria to use an MVL
- Reserves over £35,000* - after paying all final liabilities
- Company has traded over 12 months
- Shareholders are directors or employees
- Unlikely to trade again via a company within 2 years
* The minimum statutory limit for using an MVL mechanism is £25,000 - but, when taking into account processing fees, it's not cost effective unless you have at least £35,000 reserves.
Next steps:
It's important to seek current advice about using MVLs to ensure that it is the right option for you.