MVL whilst director has other companies

[jamesbrown]

First, companies A and C are probably the same company, for tax purposes, and if any tax has been avoided, you should be concerned about that. In particular, note that the associated companies rules were reintroduced on 1 April 2023.

Regarding MVL, the TAAR requires that you not be engaged in the same or a similar trade or activity for two years after the last distribution is made. So, for sure, there is no scenario in which Fred can continue to trade with C and also receive a capital distribution from the MVL of A rather than a dividend distribution. As for company B, it depends, and you will need to talk to a specialist. Frankly, it's unbelievable that you expect to get a solid answer to that here.

[cojak]

Please find below situation for Director 'Fred' who is director of all below companies

Company	SIC Category	How long established
Comp A	Software Consultancy	10 years
Comp B	Finance Leasing	4 years
Comp C	Software Consultancy	6 months

Suppose if you are winding down 'Comp A' using MVL

1. Can you do MVL on 'Comp A' if a similar SIC category company is alread active?
2. If you do MVL on 'Comp A', do we need to close down 'Comp C' alongside or can Fred trade using 'C' ?
3. if you do MVL on 'Comp A', does it affect 'Comp B' ? (as they are two different SIC)

Thanks in advance

I’m not an accountant but my solid guess is that ‘Fred’/you won’t be able to use an MVL on your Company A as is breaks Targeted Anti-Avoidance Rules (TAARs) - the very thing that you are trying to accomplish.

See this article for more info: https://www.contractoruk.com/mvl/clo...35_or_not.html

[sojan]

Please find below situation for Director 'Fred' who is director of all below companies

Company	SIC Category	How long established
Comp A	Software Consultancy	10 years
Comp B	Finance Leasing	4 years
Comp C	Software Consultancy	6 months

Suppose if you are winding down 'Comp A' using MVL

1. Can you do MVL on 'Comp A' if a similar SIC category company is alread active?
2. If you do MVL on 'Comp A', do we need to close down 'Comp C' alongside or can Fred trade using 'C' ?
3. if you do MVL on 'Comp A', does it affect 'Comp B' ? (as they are two different SIC)

Thanks in advance