Gone perm - close company down?

[Noedig]

I have just this second taken a permie role.

So - should I close the company down? A mate did this for himself last year and said he got all the money in the company tax free (how can this be so?)

There is about 200k in the coffers. Don't know how long the job will last, looks good now but I am reminded "There is no such thing as a permanent job". But I could always start another one.

Is there some simple-yet-legal "close down the company and get the money" procedure not rendered odious by Red Dawn and her compadres? I stand agog for details, if so.

My wife and myself are both directors, she's also a contractor but could go through an umbrella company.

I would be relieved to have a reason to close the company down as I may otherwise get involved in some complicated accounting arrangement with a friend, but that's another thread/story.

[wantacontract]

mate, go see your accountant...I am doing the same....

I personally would close it down, take the money and in future if needs be, then get a new company.

[Olly]

He paid no capital gains tax? unless he only had pennies there, that seems hard to believe.
200's a nice little bundle...I think I'd def cloe the company just to roll around in all those notes
.....buuuuuuuuut.......
if you don't need the cash, why not leave it there and take tax free dividends in your retirement, unless of course you've got a kick ass pension that pushes you into the 40% band

[swamp]

I have just this second taken a permie role.

BURN HIM!


Um, I think taper relief was abolished recently. This used to make it tax efficient to close your company every now and again. Now you have to pay the full whack capital gains.

Also, be very careful closing your company. If you do things in the wrong order you may lose all your money! (something to do with closed company's assets being forfeited to the state...)

[thelace]

Keep the company ticking over if you have the option to do a little bit on the side anyway, or are intending to come back to contracting? Especially if your wife can work through the company rather than a brolly?

As far as the tax implications go, definately worth an hour or two of a good accountants time!

[Ruprect]

BURN HIM!


Um, I think taper relief was abolished recently. This used to make it tax efficient to close your company every now and again. Now you have to pay the full whack capital gains.

Also, be very careful closing your company. If you do things in the wrong order you may lose all your money! (something to do with closed company's assets being forfeited to the state...)

Not strictly true - look into Entrepreneurs relief.

[Ruprect]

He paid no capital gains tax? unless he only had pennies there, that seems hard to believe.
200's a nice little bundle...I think I'd def cloe the company just to roll around in all those notes
.....buuuuuuuuut.......
if you don't need the cash, why not leave it there and take tax free dividends in your retirement, unless of course you've got a kick ass pension that pushes you into the 40% band

Provided the goverment doesn't do a tax raid on retained profits... but I'm sure this goverment wouldn't do such a ridiculous thing....would it?!

[SantaClaus]

When I closed my company years ago, I made a capital distribution with taper relief.

The remainder that could be taken as capital distribution was declared under my capital gains allowance.

No tax was due.

[Gonzo]

When I closed my company years ago, I made a capital distribution with taper relief.

The remainder that could be taken as capital distribution was declared under my capital gains allowance.

No tax was due.

The rules were changed a bit last year.

There is no taper relief (or indexation) any more.

I have seen absolutely noone kick up over the withdrawal of indexation from the calculations. This means that an increase in value purely down to inflation will be taxed. I would be livid about that.

Just a blanket 18% CGT on any gain (or 10% on the first £1,000,000 if applying entrepreneur's relief).

Still worthwhile having a look at the CGT option anyway because there is an annual amount of capital gain that is not taxed at all (£9,600 this year I think) and I would imagine that most people don't get to use that.