If you have recently come out of contract, are planning to retire soon or are returning to permanent employment, there are a variety of ways to close down your company and it’s important to seek expert advice to ensure the best solution for you.
As a contractor, one option you could consider is a members’ voluntary liquidation. Our dedicated service is specifically designed to meet the needs of contractors.
How members’ voluntary liquidations work
A members’ voluntary liquidation (MVL) is a voluntary liquidation process by a solvent company allowing the shareholders to obtain the value of the business in cash and instead of being charged income tax on the funds, a capital gains tax could be applied. In turn, this process can substantially reduce tax liabilities where you and your business meet certain relevant criteria.
With regular suggestions of a future wholesale review of the capital gains tax regime, potential future budget changes and the prospect of political change, contractors wishing to have their liquidation treated within the existing regime may need to move quickly.
Benefits for you and your company
Our team will take the time to assess your objectives before offering the best solution for your needs. Many contractors can find themselves in more complex tax positions due to working overseas. In these instances, our team will draw upon the knowledge and expertise of our international tax experts to come up with a tax efficient strategy tailored to you.
With tax legislation continually changing it’s important to seek early and up to date advice about the tax and other implications of a members’ voluntary liquidation.
Beyond any tax implications a liquidation also offers other significant benefits, mitigating any risks as a director and drawing a line in the sand with potential creditor claims. If a company is struck off without first being liquidated, a director is exposed to personal liability if claims later arise. By comparison, in a liquidation, claims are invited providing more certainty thereafter, particularly where a director is concerned about legacy issues.
If you have any questions regarding the MVL process, please contact Ian Robert or another member of our expert team to determine a reasoned, practical route forward for you and your business.
