Reply to: Moving money between companies

[peel3000]

You cannot transfer money between 2 different limited companies without loaning it. They are 2 separate entities.

I believe you have misunderstood how this works. There is a way to do what you are trying to achieve but it's a bit more complex.

You need to set up a holding company which will own your old limited company and the new SPV company. You can then transfer the money to the holding company as dividends and close your old limited company down. The holding company can then invest/loan the money to SPV company. This is the only way to do it without any tax.

Yes, thanks for your reply.
I am aware of the option of setting up a holding company; but I would think this would be a lot more complex (and costly) to run and disentangle..

As mentioned, I think liquidation is the best option just now.

Cheers

NP

[peel3000]

OK, let me rephrase it "You have decided that you must close down your Ltd, and you refuse to consider not closing it down"

It would be possible if you changed your mind on closing down your Ltd.
You are the one making it impossible because of a choice you have decided to make.

Yes, I don't see the point of keeping open a Ltd that's not trading.. That is, unless I can minimise the costs of doing so.. This still isn't as good an option as liquidation..

So.. At the moment it's looking like liquidation then - with the ER; which was something I had considered and looks like I'll end up going with as this option doesn't look to have legs...

Thanks for your input, all..

[jmann]

You cannot transfer money between 2 different limited companies without loaning it. They are 2 separate entities.

I believe you have misunderstood how this works. There is a way to do what you are trying to achieve but it's a bit more complex.

You need to set up a holding company which will own your old limited company and the new SPV company. You can then transfer the money to the holding company as dividends and close your old limited company down. The holding company can then invest/loan the money to SPV company. This is the only way to do it without any tax.

[Lance]

I could legitimately set up the SPV and charge my Ltd company for services.. Then have my Ltd company pay my SPV company - so I don't see the difference..

you could do that, but then you have CT to pay on the services you sold to to your LTD.

[WTFH]

It's not that I refuse to do it, it's that I am closing down the Ltd.. So I don't see how it's possible..

OK, let me rephrase it "You have decided that you must close down your Ltd, and you refuse to consider not closing it down"

It would be possible if you changed your mind on closing down your Ltd.
You are the one making it impossible because of a choice you have decided to make.

[GhostofTarbera]

Yes. Link?

4 posts above, I read it there also


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[peel3000]

OK, so you don't like your accountant's answers, and you don't like Lance's answers.

If you didn't close your LTD, then you could transfer the money having the Ltd as the owner of the SPV.
Since you've decided that you refuse to do that, then you'll have to get the money out of the Ltd into your personal account, then re-invest it in the SPV.

You can't just "gift the cash" as it's not yours to gift, it belongs to the Ltd.

Depends if they're factual or opinion...

It's not that I refuse to do it, it's that I am closing down the Ltd.. So I don't see how it's possible..

It belongs to the Ltd but I own the Ltd and can say what happens to the money in it - as long as it doesn't find its way directly into my personal bank account..

I could legitimately set up the SPV and charge my Ltd company for services.. Then have my Ltd company pay my SPV company - so I don't see the difference..
It makes sense to be able to do so, but just wanted confirmation one way or the other..

If you're saying for a fact that it's not possible, fair enough and I'll look into an alternative..

Cheers,

NP

[wattaj]

Does it matter? It was read online - so here I am trying to find some corroberation, rather than taking it at face value..

Yes. Link?

[wattaj]

If you can move money between companies for nothing (assuming all above board)...

You can't. Not if you want to close down the first company and walk away.

Your options are changing the SIC for your first company; loans to the SPV whilst keeping your first company in play; slowly withdrawing funds via salary/dividends to fund the SPV before killing the first company; or MVL.

Your call.

Next?

[peel3000]

Citation? Or was it a chat down the pub?

Does it matter? It was read online - so here I am trying to find some corroberation, rather than taking it at face value..

[WTFH]

Hi Lance,

Yes, I did, and it was a 'her', not a 'him'.

Not relevant as I'm closing it..

That's not avoiding tax at all.. What are you talking about? The business would be using the cash, not me...
It was my understanding that this WAS possible, as long as you can satisfactority prove that the cash stayed in the business and didn't find it's way to me directly..
Any personal income from the SPV (as div's, salary or whatever) would be subject to the appropriate income taxes..

OK, so you don't like your accountant's answers, and you don't like Lance's answers.

If you didn't close your LTD, then you could transfer the money having the Ltd as the owner of the SPV.
Since you've decided that you refuse to do that, then you'll have to get the money out of the Ltd into your personal account, then re-invest it in the SPV.

You can't just "gift the cash" as it's not yours to gift, it belongs to the Ltd.

[wattaj]

...It was my understanding that this WAS possible, as long as you can satisfactority prove that the cash stayed in the business and didn't find it's way to me directly...

Citation? Or was it a chat down the pub?

[peel3000]

Alternatively, MVL the old company, tax the tax hit (circa 10%?), then open your shiny, new SPV.

If you can move money between companies for nothing (assuming all above board), why would I take a 10% hit - only to then re-invest it into my company and potentially pay even more tax getting it back out?

It's no different, really, to me changing the business type from what it currently does to an SPV - Though I would prefer to have a clean split..

[peel3000]

Hi Lance,

Yes, I did, and it was a 'her', not a 'him'.

Not relevant as I'm closing it..

That's not avoiding tax at all.. What are you talking about? The business would be using the cash, not me...
It was my understanding that this WAS possible, as long as you can satisfactority prove that the cash stayed in the business and didn't find it's way to me directly..
Any personal income from the SPV (as div's, salary or whatever) would be subject to the appropriate income taxes..

[wattaj]

Alternatively, MVL the old company, tax the tax hit (circa 10%?), then open your shiny, new SPV.