Dissolving a company – tax implications

[level]

Thanks for those threads.

Am I right in thinking that it's better to draw out cash up to the higher rate as dividend then take the remainder as capital?

[ASB]

Thanks for those threads.

Am I right in thinking that it's better to draw out cash up to the higher rate as dividend then take the remainder as capital?

That would be my view because there is no further tax to pay on the divi keeping beneath the higher rate threshold, this then reduces the capital distribution and consequently any amount that may be chargeable to CGT.

Of course ensuring there are no other capital gains in the year in question is necessary, otherwise that will impact the amount of CGT that is paid.

[level]

Another question I have is about the 2 year period for the full 75% taper relief.

Some of the money in the company when it closes will have been received only recently. Does this mean that I have to work out exactly how much time the different amounts of money have been in the account and then apply differing rates of taper relief to retained profits held less than 2 year?

This seems like it would be very complicated. Could it be that all retained profit, whenever received, gets the 75% reduction because the company issued its share capital 5 years ago?

[ASB]

Another question I have is about the 2 year period for the full 75% taper relief.

Some of the money in the company when it closes will have been received only recently. Does this mean that I have to work out exactly how much time the different amounts of money have been in the account and then apply differing rates of taper relief to retained profits held less than 2 year?

This seems like it would be very complicated. Could it be that all retained profit, whenever received, gets the 75% reduction because the company issued its share capital 5 years ago?

My understanding is that the taper relief is available because of the length of ownership of the asset, not when the income was generated. Of course that doesn't make me right. A quick call to the companys tax office may help.

[level]

Thanks for all your help ASB