Divorce after 12 years contracting

[WordIsBond]

Open to debate, but I'd have thought changing shareholding due to divorce would be considered a pretty good non-tax reason for closing Oldco and opening Newco. Ie I reckon a decent chance they could get beneficial tax treatment even if he starts doing a similar thing soon after as sole shareholder.

I had the same thought. The two year rule is there for a reason but it isn't absolute because of the other conditions.

[flapping]

Over the last few weeks / months thinking about it all has given me a headache. Some really good responses here though, and now I'm feeling much more informed.

I've been putting a fair bit into my pension and so after corporation tax liabilities etc there will be around £20k left. Children will be shared between us 50:50.

[craigy1874]

I would definitely say the targeted anti-avoidance rule would not bite in this situation. The reason for closing the company is in no way tax motivated.

So definitely close the company, use an MVL if effective, and move on.

[gnarledcontractor]

Over the last few weeks / months thinking about it all has given me a headache. Some really good responses here though, and now I'm feeling much more informed.

I've been putting a fair bit into my pension and so after corporation tax liabilities etc there will be around £20k left. Children will be shared between us 50:50.

Maslins' will probably be able to advise more accurately, but if its only 20k after liabilities then there could possibly be more appropriate ways to distribute the remaining company funds, also I could be wrong but whatever the pension amount is might/will need go into the pot as well..

[northernladuk]

Maslins' will probably be able to advice more accurately, but if its only 20k after liabilities then there could possibly be more appropriate ways to distribute the remaining company funds, also I could be wrong but whatever the pension amount is might/will need go into the pot as well..

WB gnarly

[flapping]

I would definitely say the targeted anti-avoidance rule would not bite in this situation. The reason for closing the company is in no way tax motivated.

So definitely close the company, use an MVL if effective, and move on.

.

Am liking the sound of that. I’ll get the accountants view too

[BlasterBates]

IR35 investigations usually start with a routine audit so if the company has already been closed down it will be highly unlikely.

[Maslins]

Over the last few weeks / months thinking about it all has given me a headache. Some really good responses here though, and now I'm feeling much more informed.

I've been putting a fair bit into my pension and so after corporation tax liabilities etc there will be around £20k left. Children will be shared between us 50:50.

If your company will have circa £20k final net assets, no MVL required, and I believe that means the anti avoidance rules cannot bite.

Get your accountant to sanity check your figures (ie £20k after trading has ceased and all no cash assets/liabilities cleared off). Be aware £25k is a fairly critical cut off here. If your figure is right, probably makes sense to avoid taking further dividends from now, as (assuming you/your wife make no other capital gains this tax year) they'd suffer more personal tax than taking the funds out upon closure. You should then be able to get that final £20k as £10k each, subject to CGT, but under your annual exemptions so completely tax free.

You can start up Newco, 100% owned by you.

NB I have zero clue re the divorce/child maintenance etc, so you may well find some of your current/future money/income will need to go to her/the kids too, the above is just the tax perspective.

[bstar1]

thank you for the responses. Closing the company and worrying less, seems like a more agreeable route to take.

This is all you need to do, I got proffesional advice closed my company and went back to an old employer inside IR35, under Umbrella, If the company is closed, there is no investigation on IR35 long as there was no fraud in terms of taxes etc etc.

[flapping]

I asked my accountant whether I could apply to HMRC for clearance to set-up another company within 2 years, the response I got to closing it “will restrict you from going back into contracting for 2 years.”

Perhaps I was expecting too much from my them