CGT at LTD strike off

[abz2020]

Hi all,

Question,

if you have say £34 000 in your LTD and want to strike it off (solvent) is this the calculation. 2 owners 50/50 shares, basic rate tax payers:

£24000 allowed free of CGT (2x12000)
£10000*10%= £1000 CGT (2x5000)

Accountant corona-ed.

[northernladuk]

That's very nice... Now where is your question? Of have you asked your accountant it instead?

[ladymuck]

The question is, is that the right calculation

[ChimpMaster]

20% CGT unless you are claiming ER@10%.

Seems pointless doing what you're doing. Get the Company funds down to £25k and life will be easier.

[northernladuk]

The question is, is that the right calculation

But that's not a question either

[abz2020]

20% CGT unless you are claiming ER@10%.

Seems pointless doing what you're doing. Get the Company funds down to £25k and life will be easier.

I couldnt find CGT @ 20%, where is that defined?

[Patrick@Intouch]

You'll also need final accounts preparing and submitting to HMRC along with CT600, plus VAT and PAYE final submissions and deregistrations if you're registered and then will need to apply the correct treatment to your personal tax return in the correct period.

Accountant recovered - yay!

[ChimpMaster]

I couldnt find CGT @ 20%, where is that defined?

I was assuming you would be a HRT payer in the year but maybe not.

[Maslins]

Be aware with £34k final net assets a strike off would lead to dividend tax treatment on those funds for the shareholders. You'd need to put the company through a members voluntary liquidation (MVL) to gain capital gains tax treatment.

If you do go through an MVL, then yes your calculations are plausible. Do check with your accountant that for example both you & other owner benefit from ER, won't otherwise use annual exemption etc.

[abz2020]

Be aware with £34k final net assets a strike off would lead to dividend tax treatment on those funds for the shareholders. You'd need to put the company through a members voluntary liquidation (MVL) to gain capital gains tax treatment.

If you do go through an MVL, then yes your calculations are plausible. Do check with your accountant that for example both you & other owner benefit from ER, won't otherwise use annual exemption etc.

The one thing I was not sure about: Can one get CGT treatment when doing a strike off? Or it is only when doing MVL? Seems the latter. Please reconfirm.
And in the example above will 24000 of these 34000 be tax free for CGT and the 10 000 treated as divi? Or all 34000 as divi?