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Previously on "selling my company shares and closing shop, at least for a while"
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Surely this transaction will be caught by GAAR, it is a totally tax motivated transaction.
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Originally posted by fannyadams View PostThis sounds like the inTouch thing, although they were offering it for people with much larger reserves than 35K. I don't know the details as I decided it was outside my risk/comfort zone, but they were offering to buy for 90% of the value.
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Originally posted by arby View PostIn theory this mechanism has only been needed since the advent of the anti-phoenixing rules of April 2016.
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Originally posted by eek View Post!0% of retained profits? Maslin's who post here have a company that will do it for £995+VAT Members Voluntary Liquidation | MVL Online®
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Hmm.. A warchest of something like £300k would see around £245k extracted versus £265k-£270kish via an MVL. If any risk can somehow be mitigated I can see the attraction if it sidesteps the 2 year MVL 'issue'. Surely a risk of it being seen as the bad kind of avoidance though...
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This sounds like the inTouch thing, although they were offering it for people with much larger reserves than 35K. I don't know the details as I decided it was outside my risk/comfort zone, but they were offering to buy for 90% of the value.
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Originally posted by Maslins View PostI'm unsure of all the small print of the TiS legislation
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Can't see it being worthwhile in your position... who is the "specialist company"?
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Originally posted by arby View PostI have a limited company from which I have not taken out much in the way of dividends so the company account has a balance of roughly £35K after satisfying all tax liabilities. I have read of a mechanism whereby I sell my share (the one and only share) for 90p on the pound to a specialist company engaged in this practice and I then treat the proceeds as a capital gain subject to entrepreneur's relief.
If you were hypothetically to do an MVL, you'd pay circa £1.5k all in (inc VAT etc) in fees. You then pay capital gains tax on £33.5k, so with same assumptions, your after tax cash in pocket is ~£31.25k.
So ignoring any other differences (I appreciate your primary concern seems to be the transactions in securities rules), you're ~£1.75k better off with the MVL.
Does beg the question what/how the purchaser deals with things...but I guess that's not your problem.
I'm unsure of all the small print of the TiS legislation, but it wouldn't surprise me if it would bite in your proposed plan anyway. Yes it wouldn't be a liquidation, but it would still involve you trying to get CGT treatment from ending one business only to start a very similar one soon after.
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Originally posted by arby View PostI have a limited company from which I have not taken out much in the way of dividends so the company account has a balance of roughly £35K after satisfying all tax liabilities. I have read of a mechanism whereby I sell my share (the one and only share) for 90p on the pound to a specialist company engaged in this practice and I then treat the proceeds as a capital gain subject to entrepreneur's relief. The alleged advantage over member's voluntary liquidation is that I could start a new limited company in the same field without falling afoul of anti-phoenixing rules because I have sold the company rather than having liquidated it. The specialist company does the admin for 10% of my company's retained profit.
Clever or too good to be true? I'm not currently trading at the moment so the idea of freeing up my profit (albeit in a slightly more expensive fashion than MVL) is of interest because I can go back into my chosen field if another opportunity arises. But if I take a step back it does look like a anti-phoenixing rule avoidance mechanism which might be a red flag to HMRC?
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Originally posted by northernladuk View PostIf it were that clever it would be standard advice that's well documented and everyone would be doing it surely?
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If it were that clever it would be standard advice that's well documented and everyone would be doing it surely?
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