Informal closure or voluntary liquidation?

[bob52]

Currently in the process of closing my account and due to the £35k profit it seems that either voluntary liquidation or informal closure would cost about the same in tax/fees. Does anyone have any recommendations on the best route to take based on this amount?

[Old Greg]

Currently in the process of closing my account and due to the £35k profit it seems that either voluntary liquidation or informal closure would cost about the same in tax/fees. Does anyone have any recommendations on the best route to take based on this amount?

Talk to a professional. Please. Your accountant or Maslins.

[bob52]

Talk to a professional. Please. Your accountant or Maslins.

I have spoken to my accountant who told me it's six of one half a dozen of the other. Looking for second opinions.

[jamesbrown]

For such a small amount, I would take a dividend of 15k and then wind up without mvl. You might save something if you’re a higher or further rate taxpayer, but remember the mvl fees will be around 2k. We cannot comment on the specifics because it requires information about your personal circs (e.g., tax bracket, whether you can distribute across two years etc.), but your accountant is probably correct.

[bob52]

For such a small amount, I would take a dividend of 15k and then wind up without mvl. You might save something if you’re a higher or further rate taxpayer, but remember the mvl fees will be around 2k. We cannot comment on the specifics because it requires information about your personal circs (e.g., tax bracket, whether you can distribute across two years etc.), but your accountant is probably correct.

Thanks, I'm a higher rate tax payer.

[northernladuk]

Thanks, I'm a higher rate tax payer.

Don't you just love it when key pieces of information are trickled out bit buy bit when trying to help people... Not.

[bob52]

Don't you just love it when key pieces of information are trickled out bit buy bit when trying to help people... Not.

Not sure what was missing? My accountant hasn't suggested it can be spread over two years and said my capital gains allowance can only be used in one go.

[jamesbrown]

Not sure what was missing? My accountant hasn't suggested it can be spread over two years and said my capital gains allowance can only be used in one go.

If the MVL distributions cover two tax years, then you'll get CGT relief in two separate tax years. Of course, you can also split a dividend over two tax years. You should ask your accountant to run the actual numbers rather than provide you with vague swings and roundabouts arguments. But I'm sure they are right in their analysis. You're probably only talking about a couple of grand saved with an MVL after the fees, even as a higher rate taxpayer. BTW, the limit for capital treatment w/ a simple strike off is 25k, not 20k as I implied earlier.

[Old Greg]

Don't you just love it when key pieces of information are trickled out bit buy bit when trying to help people... Not.

The OP is resident and tax resident in the Dutch Antilles, if that is relevant (probably not, but I thought I'd mention it).