MVL - Opening new company regulations *** looking for advice***

[BarbaraW]

Hello,

I had a limited company which I decided to liquidate in February 2020 using the Members Voluntary Liquidation process.
Unfortunately, I was the unlucky one who signed a contract with Savants and Adrian Duncan, who lost his license, stole our money, and ran away from the country.
Quantuma was ordered by the court to take over. I know it is a complicated case, my money was insured but there are a lot of people whose money didn't have a bond. Duncan used my money to pay someone else, and the money I received (part of what I had in my business account - the rest was stolen) was covered by someone else account. This complicated raising the case with insurer but come on, we have August 2024 and my company is still in liquidation and I still did not get my money.

Now I need legal advice. Since then I have been working under an umbrella, however, there is a potential chance to get an outside IR35 contract.
As far as I know, the rules say, to be able to claim and keep asset disposal relief, I cannot open a similar business for the next 2 years. Since the company is still "in liquidation" I actually can't find information when that 2 years period starts. If from the completion of liquidation, I have a problem.
I found information elsewhere (not sure how legitimate that info is), that I cannot open a similar business within 2 years. Key word is "similar".
my SIC was: 66300, now would possibly be: 66110. Does it mean I can open another LTD ?



Second question: on HMRC I found:
"If the company stops being a trading company
If the company stops being a trading company, you can still qualify for relief if you sell your shares within 3 years."

Do you know when 3 years starts? from the day I started liquidation/stopped trading or the day when liquidation was finalized?
If the first option, I will miss 3 years deadline. It's beyond my control, is there anything I can do to still claim it?


Do you have any tips or suggestions on what else I can do to get my money back?
Quantuma is not very responsive, ICAEW is not taking any responsibility even though they were reprimanded by Insolvency Practice (the first time in history when the regulator was reprimanded!), and police closed the case I raised, I think they started a joint investigation in 2023! Duncan possibly spent half of the money he stole already


Thank you!
Barbara

[jamesbrown]

Sorry to hear about your woes. The legislation is always the best place to look for definitive information, although I appreciate it can be complicated. The two year rule in the TAAR begins with respect to the date a distribution is made, so unless you have received a capital distribution, it hasn’t begun. Likewise, if you receive more than one distribution, there is more than one date.

[jamesbrown]

That said, your situation is extremely unusual, and there may be some nuance that only a professional insolvency practitioner and/or lawyer that specialises in this area would be able to answer w/r to the legislation. Another option might be to proceed on the assumption that, if you do ever receive a distribution, you pay back the difference in tax between a capital and dividend distribution, so that nothing is being avoided that would trigger the TAAR. It would depend on the amount involved and the likelihood of getting it back as to whether that could make sense.

[BarbaraW]

Hi James,

Thank you for your comments.

I have received some money.
Before Duncan lost his license, after 100 calls, emails, and complaints, he made distribution, not as we agreed originally, but at least I got part of my money.

The current insolvency practitioner is not helpful or responsive, so I can't get any help there. A lawyer is quite expensive and I have already lost a lot of money that I can't afford to spend even more, especially that I'm currently unemployed and I'm looking for a new contract.

Yes, I always try to look for info in legislations and on gov websites but I couldn't find that info, or maybe I didn't understand it

The original distribution was significant, so paying back the difference between 10% and I think 34% (on already taxed money!) is not an option.

Thank you
Barbara

[jamesbrown]

Hi Barbara,

I see. In that case, if you wanted to engage in "the same or a similar trade or activity" using a new company, you would be safe to do that only two years or more after your last distribution was received. If you did so before this date, there would be a risk to that distribution, although it is hard to say precisely what that risk might be (I expect it would be lower if you were closer to the two years duration and could evidence that you had no intention of engaging in the same trade within two years when your last company was liquidated). Nevertheless, in my opinion, your safest bet would be to work through an umbrella until the two years is up and to sacrifice a slightly higher rate of tax until then, bearing in mind you saved quite a lot by taking a capital distribution, presumably with BADR too.

Cheers,

James

[Maslins]

Yuck, what a horrid situation, sorry this has happened

In a slightly positive bit of news, my view would be if you got your first distribution ages ago (I'm guessing 2+ years ago given the liquidation started 4 years ago?!), and that was the lion's share of the company's funds, then in your shoes I'd feel comfortable starting a new, similar company now. That initial distribution should be safe. Any final distribution will presumably be modest in value (hence modest amount of extra tax which might be payable if it were to be taxed as dividends instead of CGT). I also think the specifics of the situation certainly should play in your favour in the unlikely event of an HMRC challenge.

Re the remaining funds in your company currently in liquidation, I'd suggest you mentally write that off (if you haven't already). It going on for 4 years won't be helping. The liquidator that's taken over will have to file annual reports, which are an admin faff...but if there's some cash in there, they've a right to take some of it to pay their fees. I'm not necessarily saying they're deliberately stringing it out so they can charge more, I'm sure the insurance mess is a complex one to unravel...but they won't be in any rush to finalise. I doubt there's much else you can do but forget about it, and possibly at some distant point you may get a few extra pounds from it.