going abroad - what to do with ltd?

[darrenb]

All of you fellows who have gone off to Germany and Australia, what do you do with your limited company? I am paying a thousand a year for my accountant, and would dearly like to stop that if I'm working overseas. Is making the company dormant and firing the accountant the best option... or do you still find it wise to keep the accountant "to be on the safe side". Like most of you, I don't know how long I'll be gone.

It seems that if your company still exists, even in dormant form, you are still under Hector's radar, with all the unpredictability that implies. Perhaps the cleanest thing would be to close it down, and start a new one when/if I come back. But how awkward and time-consuming is that, closing down a ltd?

I could ask my accountant, but I expect he has a vested interest in keeping the thing going.

[Wanderer]

All of you fellows who have gone off to Germany and Australia, what do you do with your limited company?

If you have a load of money still in it then you could shut it down and apply for ESC-C16 to take the retained money as capital distribution which avoids paying so much tax. They are making noises about removing or limiting this concession so it might be worth acting quickly on this.

If you don't have a lot of money, assets or goodwill in the company then I'd just shut the thing down, at least it means that Hector can't come after it later on. You can start a new one for < 100 quid if you ever need one again.

Der going over der to get der der's.

[Gonzo]

I don't think that it is worth keeping the company open in this scenario.

Get your accountant to write to HMRC asking for the ESC16 and then take the remaining cash out of the company and pay capital gains tax on it.

That's what I did.

If there is a seriously large amount of cash in the company bank account and you are certain that you will be staying out of the UK for five complete tax years then you should take a holiday to a tax haven as you leave the UK and close the company while you are there, before moving to your new country. You wont then have to pay any tax on it in the UK or in your new country.

The fee that you have to pay Companies House for voluntary dissolution of your company is £10. That really is the better option than continuing to pay your accountant but make sure that your company does not owe anyone any money and remove all the cash from the bank account before you apply.

EDIT

I should add that I moved to a country that doesn't have a Capital Gains Tax but that just means that all money withdrawn from a company is treated as income. It worked out far better for me to pay CGT to the UK taxman than to pay income tax on the money in my new home.

EDIT 2

You asked about how awkward or time consuming is it to close down a company.

1. Send the form along with £10 to Companies House.
2. Companies House post a gazette notice advising that the application has been received and anyone who objects should contact them.
3. 3 months later, if noone has objected, then the company is dissolved. Any money still in the company bank account at this point becomes the property of the crown.

That is all there is to it but you might also need to get the ESC16 if there is a decent amount of cash in the company bank account that it would be better to treat as a capital gain than a dividend.


Did I mention that you should make sure that the company bank account is empty when you apply to close the company?

[gadgetman]

I closed mine, had virtually nothing left in it mind you. It was fairly straightforward, all done by email. SJD had a standard shut down fee which was about £176 I think.

[Gonzo]

Another thing to consider too, if you do decide to keep your company going, is how the tax authorities in the place you move to will view your company.

Some places don't care but others take the view that your company becomes resident in their jurisdiction at the same time that you do. Being a UK company does not necessarily mean that the company remains resident in the UK.

That could land you with a whole load of extra compliance requirements.

[darrenb]

Thanks for the replies. Very helpful information.

[darrenb]

Another thing to consider too, if you do decide to keep your company going, is how the tax authorities in the place you move to will view your company.

Some places don't care but others take the view that your company becomes resident in their jurisdiction at the same time that you do. Being a UK company does not necessarily mean that the company remains resident in the UK.

That could land you with a whole load of extra compliance requirements.

This doesn't apply to Germany, does it?

My UK accountant has advised me to keep the Ltd going a few more months to take advantage of a tax loophole. I'm working in Germany. I hope I am not risking any double taxation scenarios?