Big balance on LTD - Moving abroad - Options

[panosk75]

Hi,

I am an EU citizent and currently a UK resident (have been for more than 7 years) and have used a limited company to trade. There is now a considerable amount of money left in the company. I have been offered a permanent position that would allow me to be based abroad. I am also looking to purchase a flat abroad. Is there anything I can do to utilise the cash balance left in the company with as little as tax exposure as possible?

Thx

[Craig@Clarity]

You can apply for ESC C16 to gain acceptance that you are able to distribute the remaining retained profit in the company as a capital distribution. You could then apply Entrepreneur's Relief (provided you meet the criteria) and potentially pay about 10% personal tax.

[Dearnla]

Make yourself redundant and wind up the company.

[Craig@Clarity]

You can apply for ESC C16 to gain acceptance that you are able to distribute the remaining retained profit in the company as a capital distribution. You could then apply Entrepreneur's Relief (provided you meet the criteria) and potentially pay about 10% personal tax.

Oh, the above is part of closing down your company for it to apply

[panosk75]

yeah i am aware of this relief but even then the tax liability is substantial. Is there anything else I can do? I am not in a big rush to take the money out, but I don't want to wait till retirement either...I still have 20 or so years to go.

Can I, for example, provide 50% or even 100% of shares to the wife and maker her a shareholder? My accountant advise me that is not possible without her contributing towards the value of the company, but I have seen many reports of people doing this or something similar?

I have also seen reports in these forums of people recommending that staying out of the UK for 5 tax-years and visiting a tax-haven place can enable a tax-freee dividend, or something along those lines?

Thanks in advance.

[Craig@Clarity]

Perhaps look at your tax residency when you move abroad. If you become non UK tax resident you could potentially pay no tax on dividends depending on which country you "escape" to (where there maybe a double taxation treaty). A useful link for you HM Revenue & Customs: Income Tax when leaving the UK

[Wanderer]

Perhaps look at your tax residency when you move abroad. If you become non UK tax resident you could potentially pay no tax on dividends depending on which country you "escape" to

What if a company director bounced around a few countries for a year or so, could they potentially become non resident for tax in any jurisdiction?

[configman]

What if a company director bounced around a few countries for a year or so, could they potentially become non resident for tax in any jurisdiction?

No - you have to be able to prove that you have indefinately broken all ties with the UK - by proving residence in another country otherwise its a holiday. Evidence will be your things like your visa, and a permanent address in another country.

[Gonzo]

Hi,

I am an EU citizent and currently a UK resident (have been for more than 7 years) and have used a limited company to trade. There is now a considerable amount of money left in the company. I have been offered a permanent position that would allow me to be based abroad. I am also looking to purchase a flat abroad. Is there anything I can do to utilise the cash balance left in the company with as little as tax exposure as possible?

Thx

Your options will depend on where you are moving to and how that country will view your company and the income it generates.

Using ESC16 to take all the money out of the company as a Capital Gain and using Entrepreneurs' Relief to reduce your UK CGT liability is likely to give you the lowest tax bill. It is what I did because it was better for me to pay CGT in the UK than to draw the money after I had moved to my new home. I looked into it carefully.

I have also seen reports in these forums of people recommending that staying out of the UK for 5 tax-years and visiting a tax-haven place can enable a tax-freee dividend, or something along those lines?

What if a company director bounced around a few countries for a year or so, could they potentially become non resident for tax in any jurisdiction?

That was probably me and I do think that it is possible. You do have to satisfy HMRC that you have permanently left the UK and you must not return (except for short visits) for five whole tax years (or they will still want the CGT if you go that route, or still tax you on your income).

As I said at the start, the critical bit if you are not going to pay CGT in the UK is how your new country will view the money your company gives you and that varies from country to country so you are unlikely get a definitive answer on here.

[panosk75]

Is there any other way? Could I utilise my spouse's allowances somehow?