Shuting Businesses To Claim Entrepreneur Tax Relief - Then reopen And Then

[Olly]

ooooooooooorrrrrrrrr
leave the money in the company and pay it out as further dividends in your retirement (or as an emergency/major investment fund)
tax is the same, you don't have to loose a fortune as your pension crashes in value.

yes pension contributions are inoculated against IR35 and the gov might change laws and mess up the devious plan but it's the route I'm going down.

Also ensures there's plenty in Ltd if I decide (or am forced to) take time off.

What I really can't understand is all this talk about investing the retained profit being seen as changing the companies core business and whatever that entails.

What do big Ltds do with their profit? Stick it in Scottish widows like me? Nah didn't think so.

I'm aiming to do a solid run off work over the coming 5 years say which would see a substantial retained profit (250K). Surely too much just to sit earning poor business interest rates?

[Fred Bloggs]

.........and a huge magnet to attract Hector if he thinks he can put you through the HMRC mincer to relieve you of your £250k. That's just one reason why I keep the bare minimum of cash to cover outgoings in my business bank account.

[Robot]

From HMR&C

INS45010 - Successor companies: Introduction: What's the difference between a successor company and a phoenix company?

Successor companies are defined at INS45005. These companies are sometimes called phoenix companies because they ‘rise from the ashes’ of the liquidated company.

This guidance does not refer to them as phoenix companies because ‘phoenixism’ is generally viewed as detrimental to the Department.

But the creation of a successor company is generally to be encouraged for various reasons

•A successor company will generally pay more for the assets of the liquidated company resulting in higher dividends to creditors.

•It is better that the trade of the liquidated company is somehow continued thereby contributing to the economy through employment, payment of taxes and products.
Where the creation of a successor company is part of a deliberate strategy by the directors to avoid Crown debt, or other debt, then it can be said to be detrimental to the Department. Situations like this are described as ‘contrived liquidations’


INS45005 - Successor companies: Background: What is a successor company?

For the purposes of this guidance successor companies (often called ‘phoenix companies’) are companies set up to continue the trade of the previous failed company with the same directors or company secretaries, often trading from the same business premises with the same assets and employees.

The previous liquidated company and the successor company can be linked in several ways, but the following links are ones which may give a reason to consider whether the successor company and the previous company deserve further consideration:

•Are the directors the same or is there evidence that the directors of the previous company are connected with those of the successor company, or involved in its management?

•Is the successor company carrying on the same trade as the previous company?

•Are the employees the same?

•Is the trading or company name the same or similar?

•Are the trading premises the same?

•Did the successor company acquire assets from the previous company?

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Under ESC 16 you liquidate the company.

Robot