DIY Business Asset Disposal Relief

[Festisio]

Hello,

Just wondering if anyone has done a Business Asset Disposal Relief on their Ltd company themselves as I am no longer with an accountancy practice.

I have moved to the PAYE dark side and won't be contracting again for the forseeable. There is approx £300,000 in the Company Bank account. Corp tax all paid up.

From reading here, is it as simple as closing my LTD company and then filling out my self assessment accordingly, where I should expect a one time tax hit of £30,000 and can take the remainder £270,000 for myself?

Any gotchas I should be aware of?

Many thanks

[Craig@Clarity]

You'll need to go down the Members' Voluntary Liquidation (MVL) route with reserves of that amount if you want to take advantage of BADR.

[northernladuk]

Spend a few hundred quid getting the proper professional advice on numbers that large is a must. Get it wrong and you could easily be four or five figures down.

Speak to Chris Maslin or his team at MVLOnline

[jamesbrown]

You don't have the foggiest idea, I'm afraid. BADR is always DIY because it's claimed on your SATR. However, you don't get BADR by taking a dividend distribution, which is what your proposed action would achieve.

You cannot take a capital distribution without liquidating your company. If you want to liquidate your company, you will need to engage a liquidator, specifically to perform a Members' Voluntary Liquidation or MVL, which will allow you to close the company and distribute the reserves as capital, subject to certain constraints (known as the TAAR). You can then further claim BADR on the capital distribution when completing your SATR, subject to further constraints (less bothersome than the TAAR).

Again, since you don't have the foggiest idea, you really need to engage a professional.

[jamesbrown]

Speak to Chris Maslin or his team at MVLOnline

This. Maslins

[Maslins]

As others have suggested, there's two separate things here:

1) to qualify for BADR (indeed for it to actually be a capital gain in the first place), you'll need to put your company through a Members Voluntary Liquidation. No way around this, and it's not something you can DIY. Has to be done by a licensed insolvency practitioner.

2) once that's done, you need to declare the distributions for personal tax purposes. This bit you potentially could DIY.

[Festisio]

Thanks everyone, will look into that MVL service recommended above.