Adverse consequences of MVL

[jamesbrown]

Ah ta that makes sense its for tax reasons, the insurance bit doesn't.

I only had a few K in my company when I struck off. Took it all out first of course.

Yes, the only motivation is to take a capital distribution and then BADR for an effective tax rate of 10%. The MVL itself will cost £1-2k. It only makes sense for capital distributions in excess of £25k.

[Snooky]

I asked a friend who is a landlord and who MVL'd their contracting LtdCo. This restriction applies if your properties are held in a LtdCo, shouldn't apply if they're held in your name. Which backs up the point made originally that a person can't be subject to MVL.

The original paragraph in the Statement of Fact said:

no proposer..., either personally or in any business capacity has:

• in the last 5 years been declared bankrupt or been the subject of bankruptcy proceedings, an Administrative Receivership, a Company or Partnership or Individual Voluntary Arrangement, a Debt Relief Order, an Administration Order, a Compulsory Liquidation, a Creditors’ Voluntary Liquidation, a Winding Up Order or any equivalents in Scotland or Northern Ireland

The broker went back to the insurer and explained in full detail, and got this response:

Everything the client states is correct but unfortunately we have taken the stance that any liquidation proceeding would be a decline. While an MVL is accompanied by a declaration of solvency, until the process is complete an MVL can move to a CVL which could be insolvent at any point if the liquidator determines the entity cannot meet it's debt obligations.

As such we would not consider any liquidation proceedings that are ongoing

I guess I can understand that. I know my company doesn't have any debts lurking in the shadows which might swallow up the assets, but they don't, and that's partly what the job of the liquidator is. Very annoying though.

[ladymuck]

Well my friend has had no issues getting landlord insurance in their personal name, with their properties not being held in a LtdCo, so perhaps you need to shop around a bit.

[vetran]

The original paragraph in the Statement of Fact said:

[/I][/LIST]
The broker went back to the insurer and explained in full detail, and got this response:



I guess I can understand that. I know my company doesn't have any debts lurking in the shadows which might swallow up the assets, but they don't, and that's partly what the job of the liquidator is. Very annoying though.

ah that makes sense. typical insurers the devil cavorts in the detail!