Closing Down LTD company - TAX EFFICIENT WAY

[Gonzo]

Finally, my accountant agreed to close down LTD company (btw, even if he said NO i would still do it).

Now, this is my question after paying Corp Tax in FULL, not invoicing since Oct 2009, iam sure iam eligible and i can convince the tax inspectors that iam not trading anymore.

The left over money in business account is £20,270 and after declaring ESC 16 he is saying that i should pay £2850 which works around 14% (CGT).

Now, i have checked in another forum they are suggesting that this is high and what i don't understand is CGT currently stands @ 18% surely this is less.

Is my accountant lying or incorrect or am i missing anything here?

Could someone share their views?

Thanks

Have you remembered to include the annual CGT allowance in your calculations?

For individuals, during the 2010/2011 tax year the first £10,100 of capital gains will be tax free. Don't forget to include all your capital gains when working out what you have to pay tax on. The HMRC site is pretty good on this I think. HM Revenue & Customs: Capital Gains Tax

[Gonzo]

I should also add, that if you apply for entrepreneurs' relief on your personal tax return then the CGT is 10% not 18%. (It is not actually 10% tax, you multiply the gain by 5/9 and pay 18% tax on that but it works out the same).

I am not an accountant and not qualified to give you advice on all this. I would ask your accountant for an explanation if I were you.

[ASB]

Finally, my accountant agreed to close down LTD company (btw, even if he said NO i would still do it).

Now, this is my question after paying Corp Tax in FULL, not invoicing since Oct 2009, iam sure iam eligible and i can convince the tax inspectors that iam not trading anymore.

The left over money in business account is £20,270 and after declaring ESC 16 he is saying that i should pay £2850 which works around 14% (CGT).

Now, i have checked in another forum they are suggesting that this is high and what i don't understand is CGT currently stands @ 18% surely this is less.

Is my accountant lying or incorrect or am i missing anything here?

Could someone share their views?

Thanks

Has it ever occurred to you to actually say to your accountant something like "I'm not sure how you have reached that number".

You also talk about 20k + change "in the company account". What is in the company account bears no definite relationship to what is being distributed. The company assets extend beyond its cash in the bank. What about things you have bought in the pursuance of trade, the odd laptop, printer etc.

If the company has other non cash assets with a book value of around 5k then your accountants figures would be about right. It may be that the book value of the assets is materially different to their current actual value (just depends on what they are, when they were bought what the capital allowance regime use and what the depreciation policies were - this should be readily available from your annual accounts). If this is the case it may well be worth revaluing these which could lead to a CT rebate.

It seems to me you have no chance whatsoever of ascertaining what you may be missing without asking your accountant to explain - in terms you understand. The fact you have failed to understand them doesn't make them a liar (why such vitriol?) or stupid.

[secontrator]

Has it ever occurred to you to actually say to your accountant something like "I'm not sure how you have reached that number".

You also talk about 20k + change "in the company account". What is in the company account bears no definite relationship to what is being distributed. The company assets extend beyond its cash in the bank. What about things you have bought in the pursuance of trade, the odd laptop, printer etc.

If the company has other non cash assets with a book value of around 5k then your accountants figures would be about right. It may be that the book value of the assets is materially different to their current actual value (just depends on what they are, when they were bought what the capital allowance regime use and what the depreciation policies were - this should be readily available from your annual accounts). If this is the case it may well be worth revaluing these which could lead to a CT rebate.


It seems to me you have no chance whatsoever of ascertaining what you may be missing without asking your accountant to explain - in terms you understand. The fact you have failed to understand them doesn't make them a liar (why such vitriol?) or stupid.

[QUOTE=ASB;1164286]Has it ever occurred to you to actually say to your accountant something like "I'm not sure how you have reached that number".

I have already asked this question to my accountant.

BTW, i don't have to reveal all the conversation that i have with my accountant. I will only reveal what is relevant to the forum.

Thanks

[ASB]

[QUOTE=secontrator;1164426]

Has it ever occurred to you to actually say to your accountant something like "I'm not sure how you have reached that number".

I have already asked this question to my accountant.

BTW, i don't have to reveal all the conversation that i have with my accountant. I will only reveal what is relevant to the forum.

Thanks

Ok, so maybe I put that it a slightly aggressive manner. Of course you don't have to reveal all the discussions your have had with your accountant.

I was simply trying to point out that the answer to "I've got 20k in the company how much CGT should I pay on dissolution" is £1800 (or potentially £1000 with entrepeneurs relief); but that is only accurate if that sum is the total of the shareholders funds. Your accountants answer is by all account £2800.

You seem determined that your accountant is wrong (and that could be the case). Nobody can judge from the information you have divulged.

[secontrator]

[QUOTE=ASB;1164594]

You seem determined that your accountant is wrong (and that could be the case). Nobody can judge from the information you have divulged.

Or you seem to be determined to prove that iam wrong.

Also, you prejudged that my accountant is right. Part of the problem is the accountant most of the times which everyone can accept it.

I know my accountant is not my financial advisor he is my accountant/book keeper but, sometimes i have to rely on him even though i might have my done my research/advise very well.

Thanks