MVL alternative?

[spindrift]

I’m planning on retiring next year and have sufficient funds for MVL to make sense. Even with entrepreneurs relief this is still quite an expensive process and I’m wondering if it is really necessary when I don't need all the funds immediately.

Is there a legal reason why I cannot run the business for several more years and continue to pay myself salary, dividends (*capped at base-rate) and expense pension contributions while having no turnover?

[LondonManc]

I’m planning on retiring next year and have sufficient funds for MVL to make sense. Even with entrepreneurs relief this is still quite an expensive process and I’m wondering if it is really necessary when I don't need all the funds immediately.

Is there a legal reason why I cannot run the business for several more years and continue to pay myself salary, dividends (*capped at base-rate) and expense pension contributions while having no turnover?

Not that I’m aware of. Have you asked your accountant? You should be able to hunt around for an accountant that would manage it on a reduced rate too.

[NowPermOutsideUK]

You can do this but you run the risk of the tax rules changing as well as admin costs. I wish I had taken advantage of MVL before I left the UK but it depends on retained funds I suppose

[Lance]

Yes you can.
In fact my medium term plan is to do exactly that.
Will probably do little bits and pieces of work to tick over.

[LondonManc]

Yes you can.
In fact my medium term plan is to do exactly that.
Will probably do little bits and pieces of work to tick over.

Funnily enough I was going to suggest this - part time contracts, work over the winter months, etc.

[tl97]

Worth also looking into paying it into a SIPP...

[fonejacker]

If you take the money out with the MVL you can invest it in the stock market or elsewhere, this could over time easily pay back the costs of the MVL process. All that money will just be sitting in the company otherwise doing not much (unless you invest via the company but not sure going that route is a good idea)

[northernladuk]

You can do this but you run the risk of the tax rules changing as well as admin costs. I wish I had taken advantage of MVL before I left the UK but it depends on retained funds I suppose

Were you retiring? No? So pointless then.

[eek]

Were you retiring? No? So pointless then.

It wasn't pointless - it would have allowed him to extract the money for himself and then he could have used it to lend a new (second) company money to purchases the BTL properties he continually is trying to extract money out of.

If he had done things sensible in the first place all the income from those properties would be tax free (up to the point the original loans from him to the company had been repaid).

However, he didn't do that so is now testing any hare brained scheme he can come up with to see if it will work - and the last one has a humdinger that he missed for he isn't as bright as he thinks he is.

[Maslins]

Certainly no reason why you can't drip feed salary/dividends/pension contributions over several years. A few things to mention:
- for the salary/pension, you'll likely have no issue getting CT relief the first year or two, but if you continue for a while with no company income to offset these against, it will limit what further CT relief you can get.
- for salary/dividends, whether it's a good idea depends on your other income. If you've gone into a high paid job/are on a hefty pension, with you being in higher rates by virtue of that, this option probably isn't a good one for you. If on the other hand you'll have no/negligible other income for a while (so personal allowance/basic rate band available), which sounds like it may be the case for you, it can work well.
- you will have ongoing accounting responsibilities if you keep the company going a few years. If you need assistance with this, there will be a cost associated. If your main concern is re professional fees, unsure how that will stack up against the cost of an MVL.