40 grand...closing company...

[Chevy]

I'm broken... Laid up for 4 months. Contract came to an end in December anyway and have had company open for 9 years. Time to close it methinks.

Got about 40grand in the company account. Has anyone got a simple answer to the best way to get it out without Hector scr3wing me?


Make your answer's as wordy as you like - I'm not going anywhere I guess...

[ChimpMaster]

Assuming you've already hit the 40% tax rate this year and want to close down soon as possible - apply for Taper Relief. Your accountant will know more and will be able to initiate the process.

[Dow Jones]

CGT = 10% - up to £ 1m

I'd wait for the next financial year, when you'd have no other income and then get your hands on the £ 40k which is a nice tidy sum that won't let go over the 40% rate. So it's 10% = £ 4k plus another £ 10k tax/nic = £ 14k total, so £ 26k net in your pocket (assuming CGT stays at 10%)

[MrRobin]

I'd wait for the next financial year, when you'd have no other income and then get your hands on the £ 40k which is a nice tidy sum that won't let go over the 40% rate. So it's 10% = £ 4k plus another £ 10k tax/nic = £ 14k total, so £ 26k net in your pocket (assuming CGT stays at 10%)

Why would you pay another £10k tax/nic if you were taking it as capital gains?! If you took it as salary, then why would you pay the initial 10%?

[VectraMan]

I'd wait for the next financial year, when you'd have no other income and then get your hands on the £ 40k which is a nice tidy sum that won't let go over the 40% rate. So it's 10% = £ 4k plus another £ 10k tax/nic = £ 14k total, so £ 26k net in your pocket (assuming CGT stays at 10%)

Pay a £40K dividend on the 6th April, and £35K ish will be tax free with the rest at 22% = £38K ish.

That assumes you don't work next year.

[Dow Jones]

You are right

It's not like dividends, it's CGT, so £ 4k is the lot. Alternatively, drawing a salary incurs 10% tax/nic.
Thanks for the correction Mr Robin.
Not sure about Vectra's suggestion - he might be right too!

[where did my id go?]

ESC C.16 - if granted by the revenue will allow you to take it as capital, combine with taper relief and there will be no tax at all to pay.

[KentPhilip]

When I closed my last company years ago I think I made myself redundant, which entitled me to some tax free cash.
Can't remember any more though.

[The Master]

ESC C.16 - if granted by the revenue will allow you to take it as capital, combine with taper relief and there will be no tax at all to pay.

I'm thinking of doing much the same for much the same reasons. Does anyone have any idea how long it takes for the revenue to grant ESC C.16 and how likely (or not) they are to do it with a typical contractor Ltd? Also do you simply have to get your application for taper relief in by its removal in April or does it depend on when ESC C.16 is granted?

[max]

I'm thinking of doing much the same for much the same reasons. Does anyone have any idea how long it takes for the revenue to grant ESC C.16 and how likely (or not) they are to do it with a typical contractor Ltd?

A couple of months should do it.

99% likelihood you'll get it

Also do you simply have to get your application for taper relief in by its removal in April or does it depend on when ESC C.16 is granted?

No...you need to stop trading for 3 months and apply, and payout by april.


Next time you have £50k to waste...please let us know so we can suggest better places to waste it!