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MVL before 3rd Mar 2021

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    MVL before 3rd Mar 2021

    Hi All,

    I have been contracting for last few years and have more than 200K profit in my Ltd. I stopped contracting last year and I am on PAYE now. My Ltd has me and my wife as share holder of class A and class B type shares (equal shareholding).

    I am planning to close my Ltd using MVL before 3rd Mar 2021. The reason I want to close before 3rd March is that I fear that govt may remove entrepreneur relief and may bring it in line with CGT. Worst still, govt may bring CGT in line with personal tax (I know its all up in the air at the moment but ER has been in the eyes of the chancellor for some time and is an easy target)

    I have spoken to a Liquidator who is ready to put the company in liquidation before 3rd March.

    My query is around cash distribution. As per liquidator, the tax implications are based on the date of the cash distribution so cash needs to be distributed by 2nd Mar 2021. The liquidator is also ready to distribute all cash except 10K that they will keep until final distribution.


    The liquidator is asking me to transfer funds in their account before they are appointed. I am not comfortable doing this but the liquidator is saying that they have been doing this for more than 20 years.
    Is my cash protected if I transfer it to liquidator before they are appointed?
    How can I ensure that I would get this cash back from them?
    Will it be considered by HMRC as cash distribution as part of liquidation?

    I am happy to transfer funds to the liquidator online/ by visiting branch after they are appointed but I am not sure if I am legally allowed to do so once I have appointed a liquidator? Could anyone please clarify if I can transfer the funds myself online/ by visiting branch to the liquidator at the same time as I appoint them or slightly after? If I am allowed, then it appears to me a safe option as the funds are being sent to them after they are appointed.


    @Maslins, why you do not allow cash transfer like above? I am interested to work with you for my liquidation but looks like you wait for bank to transfer cash which may not work for me as I want cash distribution before 3rd Mar 21.

    #2
    I can’t help much but I know plenty of people who went down the transfer out yourself route.l and we’re fine. But you need to get cracking and you’ll pay a premium for this.

    But if your target is 2nd March you really are cutting it fine. That’s 7 working days. Are your accounts even ready to start?

    Maslins has answered a few times in other posts as to why they follow the full process of banks transferring to them. I used him and was (is) excellent for the cost.

    I’d be inclined to say wait to see what happens (if anything) at the budget.

    Comment


      #3
      Originally posted by NoviceContractor View Post
      Hi All,

      I have been contracting for last few years and have more than 200K profit in my Ltd. I stopped contracting last year and I am on PAYE now. My Ltd has me and my wife as share holder of class A and class B type shares (equal shareholding).

      I am planning to close my Ltd using MVL before 3rd Mar 2021. The reason I want to close before 3rd March is that I fear that govt may remove entrepreneur relief and may bring it in line with CGT. Worst still, govt may bring CGT in line with personal tax (I know its all up in the air at the moment but ER has been in the eyes of the chancellor for some time and is an easy target)

      I have spoken to a Liquidator who is ready to put the company in liquidation before 3rd March.

      My query is around cash distribution. As per liquidator, the tax implications are based on the date of the cash distribution so cash needs to be distributed by 2nd Mar 2021. The liquidator is also ready to distribute all cash except 10K that they will keep until final distribution.


      The liquidator is asking me to transfer funds in their account before they are appointed. I am not comfortable doing this but the liquidator is saying that they have been doing this for more than 20 years.
      Is my cash protected if I transfer it to liquidator before they are appointed?
      How can I ensure that I would get this cash back from them?
      Will it be considered by HMRC as cash distribution as part of liquidation?

      I am happy to transfer funds to the liquidator online/ by visiting branch after they are appointed but I am not sure if I am legally allowed to do so once I have appointed a liquidator? Could anyone please clarify if I can transfer the funds myself online/ by visiting branch to the liquidator at the same time as I appoint them or slightly after? If I am allowed, then it appears to me a safe option as the funds are being sent to them after they are appointed.


      @Maslins, why you do not allow cash transfer like above? I am interested to work with you for my liquidation but looks like you wait for bank to transfer cash which may not work for me as I want cash distribution before 3rd Mar 21.
      This the way liquidation works. Once hired you have to trust your liquidator.

      Regarding Maslins, the more quickly you want your money out, the more expensive its going to be.

      If you want cash and doing it quickly (both more involved and therefore more expensive) you need to go to someone like Begbies Traynor (or your liquidator).
      "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
      - Voltaire/Benjamin Franklin/Anne Frank...

      Comment


        #4
        Originally posted by MrButton View Post
        I can’t help much but I know plenty of people who went down the transfer out yourself route.l and we’re fine. But you need to get cracking and you’ll pay a premium for this.

        But if your target is 2nd March you really are cutting it fine. That’s 7 working days. Are your accounts even ready to start?

        Maslins has answered a few times in other posts as to why they follow the full process of banks transferring to them. I used him and was (is) excellent for the cost.

        I’d be inclined to say wait to see what happens (if anything) at the budget.
        Do you mean transfer out before liquidator was appointed or was the transfer after the liquidator is appointed?

        Comment


          #5
          Surely any measures announced in the budget won't take immediate effect and you'll have until the Finance Act passes through Parliament and is in force from the new financial year? That gives you an extra month.

          Comment


            #6
            Originally posted by ladymuck View Post
            Surely any measures announced in the budget won't take immediate effect and you'll have until the Finance Act passes through Parliament and is in force from the new financial year? That gives you an extra month.
            Was ER limit reduction from 10M to 1M last year not applied immediately (same date as budget was announced on)?

            Comment


              #7
              *sucks teeth*

              Ooh, I wouldn't rely on that assumption LM, not in these cash-strapped times...
              "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
              - Voltaire/Benjamin Franklin/Anne Frank...

              Comment


                #8
                Originally posted by NoviceContractor View Post
                Was ER limit reduction from 10M to 1M last year not applied immediately (same date as budget was announced on)?
                True. Not a piece of legislation that was ever going to impact me so I didn't pay it much attention.

                You must have huge amounts of cash in your company if you're worried about CGT to the extent that you're willing to pay a lot of money to wind up within 7 days on a hunch. How up to date are your pension contributions?

                Comment


                  #9
                  Originally posted by cojak View Post
                  *sucks teeth*

                  Ooh, I wouldn't rely on that assumption LM, not in these cash-strapped times...
                  I'm just one of life's naive rose-tinted types

                  Comment


                    #10
                    Originally posted by cojak View Post
                    This the way liquidation works. Once hired you have to trust your liquidator.

                    Regarding Maslins, the more quickly you want your money out, the more expensive its going to be.

                    If you want cash and doing it quickly (both more involved and therefore more expensive) you need to go to someone like Begbies Traynor (or your liquidator).
                    Equally if you want the money now you can't wait for the liquidator to take control of your bank account and receive the money from your bank - that takes time you are not willing to waste.

                    Hence you only choice is to do what the liquidator says which is transfer the money now so they can pay it to you otherwise your time scales are dependent on third parties even the liquidator has zero control over see MVL: Metro Bank not releasing my funds for 2 months (contractoruk.com)
                    merely at clientco for the entertainment

                    Comment

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