Did I miss something on Entrepreneurs Relief?

[handyandy]

Just hope the government doesn't blow out my life-plans completely!

That seems to be their objective over the past few years whatever socio-economic group you are in! We seem to be livening in very uncertain times and planning ahead is not that simple any more.

[NickX]

Close down and claim ER while you still can, and use a brolly until quitting the game if that horizon is near enough.

Hi there, I am interested in this. Do we know if closing down via the MVL route then using an umbrella company in place of the limited company can be done without jeopardising the Entrepreneurs Relief ?

[Hobosapien]

Hi there, I am interested in this. Do we know if closing down via the MVL route then using an umbrella company in place of the limited company can be done without jeopardising the Entrepreneurs Relief ?

Read elsewhere on here that HMRC currently don't view being employed in same arena as previously contracted through Ltd is a rejection for ER.

So looks possible to me but make sure you research fully before going down that route, then let us know how it worked out.

[TheCyclingProgrammer]

Hi there, I am interested in this. Do we know if closing down via the MVL route then using an umbrella company in place of the limited company can be done without jeopardising the Entrepreneurs Relief ?

Read elsewhere on here that HMRC currently don't view being employed in same arena as previously contracted through Ltd is a rejection for ER.

Just to keep repeating what has been said several times on here...the new two year rule does not relate directly to a claim for ER, but whether you can treat the extracted profit as *capital*.

Capital treatment can still be favourable even without ER vs income treatment as you have a separate CGT allowance and the rates are lower than higher rate dividend tax.

[NickX]

Read elsewhere on here that HMRC currently don't view being employed in same arena as previously contracted through Ltd is a rejection for ER.

So looks possible to me but make sure you research fully before going down that route, then let us know how it worked out.

Thanks for the reply, I am still weighing this up, but at the moment I am thinking that continuing contracting through an umbrella isn't worth the risk of losing the benefit of the Entrepeneur's Relief so may just settle for retiring straight away.

I will keep the forum posted though.

[NickX]

Just to keep repeating what has been said several times on here...the new two year rule does not relate directly to a claim for ER, but whether you can treat the extracted profit as *capital*.

Thanks for the response. Very good point as the penalities of the extracted profit being taxed as dividends would be even more costly than simply not getting the Entrepeneurs Relief.

Because the MVL \ ER appears to be a very tax efficient way of extracting the funds I am now thinking its probably best not to do anything that could jeopardise this.

[Tinfed]

Hi all,

I’m a one man-contractor ltd co. trying to understand my future ability to apply MVL, obtain entrepreneurs relief, and extract profits from my company at 10% CGT in about two years time.

Reason for wind up: leaving UK & going home, hence not planning on starting up any new companies within 2 years.

In two years time I'm expecting(hoping) to have ~£100k in retained cash upon wind up.

Does this sound like an open and shut case, or am I one of the ones in HMRC's sights for future changes to wind up relief?

[eek]

Hi all,

I’m a one man-contractor ltd co. trying to understand my future ability to apply MVL, obtain entrepreneurs relief, and extract profits from my company at 10% CGT in about two years time.

Reason for wind up: leaving UK & going home, hence not planning on starting up any new companies within 2 years.

In two years time I'm expecting(hoping) to have ~£100k in retained cash upon wind up.

Does this sound like an open and shut case, or am I one of the ones in HMRC's sights for future changes to wind up relief?

The changes are in the future so how would we know what HMRC have planned...

[SueEllen]

The changes are in the future so how would we know what HMRC have planned...

We have crystal balls.

[Tinfed]

The changes are in the future so how would we know what HMRC have planned...

I suppose I'm just wondering whether or not the relief was originally intended to benefit people in cases such as mine (where I'll be packing up shop to leave UK)?

I've read some people believe HMRC will soon crack down on ER in future, not sure what they are basing their concerns upon, and whether these are centred around changes to anti-pheonixing rules, or more broadly to one person ltd co's in general?