Liquidating company with ER - impact on personal allowance and childcare entitlements

[Scoooby]

I know this is potentially going to change in the upcoming budget, but as it stands this now.

Does anyone know if the funds obtained from liquidating you company with Entrepreneurs Relief applied counts towards 'income' for assessing whether you need to:
- pay back your personal allowance (from £100k to £120k)
- pay back child benefit (from £100 to £120k)

And also any impact to eligibility for the following which I think might have a £100k income cap:
- Free nursery funding for 1140 hours from August 2020
- Taxfree childcare scheme with 20% reduction on childcare payments up to £2k per child etc.

Thinking about this specifically for Scotland, but I suspect the same will apply UK wide?

[Andy Hallett]

I know this is potentially going to change in the upcoming budget, but as it stands this now.

Does anyone know if the funds obtained from liquidating you company with Entrepreneurs Relief applied counts towards 'income' for assessing whether you need to:
- pay back your personal allowance (from £100k to £120k)
- pay back child benefit (from £100 to £120k)

And also any impact to eligibility for the following which I think might have a £100k income cap:
- Free nursery funding for 1140 hours from August 2020
- Taxfree childcare scheme with 20% reduction on childcare payments up to £2k per child etc.

Thinking about this specifically for Scotland, but I suspect the same will apply UK wide?

*I'd get professional advice from your accountant*. However, my understanding was that liquidation proceeds would be treated as CGT and not treated as income.

[Montymoore]

MVL proceeds are counted as capital for the moment!

Also mos benefits look at income rather than capital. One's capital is only looked at when assessing how much to pay for social care and school bursaries as far as I know.

More info here

Entrepreneurs Relief Tax implications in Liquidation - Company Rescue

[Lance]

I know this is potentially going to change in the upcoming budget, but as it stands this now.

Does anyone know if the funds obtained from liquidating you company with Entrepreneurs Relief applied counts towards 'income' for assessing whether you need to:
- pay back your personal allowance (from £100k to £120k)
- pay back child benefit (from £100 to £120k)

And also any impact to eligibility for the following which I think might have a £100k income cap:
- Free nursery funding for 1140 hours from August 2020
- Taxfree childcare scheme with 20% reduction on childcare payments up to £2k per child etc.

Thinking about this specifically for Scotland, but I suspect the same will apply UK wide?

forget ER. ER is just a modification of the handling of CGT.
Read this Capital Gains Tax: Capital Gains Tax rates - GOV.UK