Company Wind Up

[drob1984]

This is just from a personal tax perspective, so the company still has to pay Corp/VAT etc

I think the Entrepreneurs Relief is from a UK personal tax perspective also, so I'd guess if you wound a company up once in NZ and a NZ tax resident this would be oversea income and therefore perhaps could fall under the exemption, although I'm not sure as not all income types are included according to the link, whereas dividends definitely are so I don't see a reason why this isn't possible (providing the criteria for the exemption are meet) to withdraw the cash as dividends once you're a NZ tax resident and then use the exemption on you NZ tax return

Although it would be interesting to hear from someone who has actually moved back to NZ or is familiar with UK personal tax

Thanks for further clarification. So effectively... pay the corp tax. Then everything else just withdraw as a dividend once a NZ tax resident and any taxation would be exempt. So if after tax, left with £80K - can just pay myself that in dividends. Close the company as close to the company tax year-end as possible. That's how I interpret the above.

Only issue I have is that I was a NZ tax resident in 2014, so I may have to wait a few years before I can do this (I have not claimed transitional residency before).

[Rictastic]

This is just from a personal tax perspective, so the company still has to pay Corp/VAT etc

I think the Entrepreneurs Relief is from a UK personal tax perspective also, so I'd guess if you wound a company up once in NZ and a NZ tax resident this would be oversea income and therefore perhaps could fall under the exemption, although I'm not sure as not all income types are included according to the link, whereas dividends definitely are so I don't see a reason why this isn't possible (providing the criteria for the exemption are meet) to withdraw the cash as dividends once you're a NZ tax resident and then use the exemption on you NZ tax return

Although it would be interesting to hear from someone who has actually moved back to NZ or is familiar with UK personal tax

[drob1984]

I spoke to a NZ tax accountant and he informed me that NZ had a 4 year tax exemption for returning citizens on overseas income (implemented to entice skilled workers back to NZ)

Temporary tax exemption

So I'm thinking once I'm back in NZ and qualified as a NZ tax resident, I can just transfer the bulk of my companies cash to my NZ account and then just wind up my company using an straight forward MVL (with cash under £25000)

Can you be a bit more specific on this, as returning to NZ is an option I have as well.
Say in your case.. you have £90K in your company account.

I assume you'll have to pay any corp tax UK for the current company year that your company would owe?
What about Entrepreneurs Relief. Would that still apply or are you saying you can withdraw all of your company funds (after the corp tax bit) and you wont pay any tax on that if you transfer it to NZ?

Thanks in advance.

[Rictastic]

I spoke to a NZ tax accountant and he informed me that NZ had a 4 year tax exemption for returning citizens on overseas income (implemented to entice skilled workers back to NZ)

Temporary tax exemption

So I'm thinking once I'm back in NZ and qualified as a NZ tax resident, I can just transfer the bulk of my companies cash to my NZ account and then just wind up my company using an straight forward MVL (with cash under £25000)

[fidot]

Think it is this one https://www.contractoruk.com/forums/...=Bona+vacantia

[northernladuk]

I seem to remember another query from an Antipodean where he left funds in his Ltd Co. after returning home, which he eventually lost. So I'd look into that situation to ensure you do't lose any money.

Anything more to help at all? Further context? Links? What situation?

I'd take a guess, seems that all we can do with that information, that the company got struck off and assets became bona vacantia. As the OP is doing things properly there is little chance of that happening.

[JohntheBike]

Hi

Has anyone had experience with winding up a limited company and the most tax efficient method for doing this:

My last invoice/payment will come through mid October (2019) and I plan on moving back to NZ mid December, on the last payment I'll have around £90000 in my company bank account (so let say £80000(ish) retained profit) I also have been drawing £3000/Month plus £165/week director fees

I'm wondering if it's tax efficent to continue the £3000/month drawings until the next tax year in April 2020, the withdrawing the next years £3000 x 12 and then winding up via MVL in the next tax year thereby reducing profits to be taxed

Or

If it's best just to start MVL immediately after my last payment in October

Or

Something else?

I seem to remember another query from an Antipodean where he left funds in his Ltd Co. after returning home, which he eventually lost. So I'd look into that situation to ensure you do't lose any money.

[Rictastic]

ok, so it's looking like withdrawing an amount to take this years dividends up to around the £36,000 mark fairly soon and then starting with an MVL upon payment of my last invoice which will be around mid October

[Maslins]

Yeah I probably would be earning upwards of £50,000 equivalent, although I'm pretty sure NZ/UK have a double taxation treaty, which I think means if my tax on UK dividends/CG etc is paid within the UK then it won't be considered for NZ taxation

If you're move is expected to be semi permanent, and you move in Dec 19, then I expect you'd become tax resident in NZ from the date you move. Any dividends paid out of your UK company after that date would then be taxable in NZ, not in the UK.

Ie so if you drip fed dividends after that date, your UK taxable income would be £nil, and your NZ taxable income would be £50k+ (new salary) PLUS £36k (your £3k/month dividends). If you're anticipating that your NZ salary would be taxable in NZ, and your dividends taxable in UK, each receiving the equivalent of personal allowance/basic rate band in the different country, I think you'll be disappointed.

[Rictastic]

Hi

Yeah I probably would be earning upwards of £50,000 equivalent, although I'm pretty sure NZ/UK have a double taxation treaty, which I think means if my tax on UK dividends/CG etc is paid within the UK then it won't be considered for NZ taxation

Also if I had to wait until Mar/Apr to start looking for work in NZ to contain all income into the current UK tax year, it wouldn't be a problem

I'm hoping that that would mean that the fact that I've moved to NZ is somewhat irrelevant regarding how it's tax in the UK.... but yes, as you've said probably best to talk to someone in NZ

[Maslins]

Do you anticipate earning significant money in NZ from fairly soon after you arrive there (whether that be from some kind of business vehicle you set up, permanent role, or even pension)? If so, then your drip feeding dividends idea probably isn't great. Those dividends would likely be taxable in NZ at whatever your marginal rate would be. I have zero clue what NZ tax rules are like, but if you'll be on a salary of the equivalent of £50k and their tax rules are similar to ours, then those dividends would be taxed at higher rates.

Some might say I'm biased, but I think it makes sense to get a clean break and do an MVL. Yes you'll suffer the fairly modest CGT in the UK. However you can then take those post tax funds to NZ without worrying admin/further tax consequences relating to your old company, or any impact on NZ tax rules.

...having said that, would be a good idea to have a quick chat with an NZ based tax adviser, in case they have some quirky rules that make the above daft.

[northernladuk]

You need to speak to Maslin at MVLOnline with those figures.

He's a contractor accountant as well so can add the efficiency advice as well.

[Rictastic]

Hi

Has anyone had experience with winding up a limited company and the most tax efficient method for doing this:

My last invoice/payment will come through mid October (2019) and I plan on moving back to NZ mid December, on the last payment I'll have around £90000 in my company bank account (so let say £80000(ish) retained profit) I also have been drawing £3000/Month plus £165/week director fees

I'm wondering if it's tax efficent to continue the £3000/month drawings until the next tax year in April 2020, the withdrawing the next years £3000 x 12 and then winding up via MVL in the next tax year thereby reducing profits to be taxed

Or

If it's best just to start MVL immediately after my last payment in October

Or

Something else?