Winding up company

[ASB]

My company's y/e was on 4th January. I have just compiled the company's accounts and shareholder's equity was £21.4k.

This is now down to £20.4k as a result of a month's salary payments The company is 50% owned by me and 50% by my wife. The CGT allowance is £9,600, so a £19,200 capital distribution would be tax free, as I have made no capital gains this year. As a matter of fact, of the company's assets, £2,120 is plant + machinery, which is a laptop, a PC, and some networking hardware. The laptop (£1800 just over 2 years ago) is knackered but serviceable, a faster better one sold for only £400 on ebay.

The PC consists of a dodgy 20" TFT with a line down the middle, and a desktop with 2 terabyte drives, a Quad Core Q9550, and 8GB of RAM.

So I guess I could reasonably sell the lot to me for £1,000, writing off the £2120, but earning £1000.

Anyway, a capital distribution would then be perfect.

But I haven't done this before.

How complex is it? I guess it would be a matter of drawing up abbreviated accounts, or otherwise I could extend the financial year.

I don't have an accountant, I could be persuaded to use one, but it's not something I've needed before.

You need to ASK the IR for ESC16 before making a capital distribution. This involves giving certain undertakings. If they approve (they should) then the distribution is capital and get the CGT regime. If they don't then it is the same as any other dividend and gets the income regime. Somewhere in the archives I did post up the letter I used.

You can't usually make a capital distribution unless you are winding up, though there are ways which might achieve the same effect related to share split/buyback.

[moraghan]

My company's y/e was on 4th January. I have just compiled the company's accounts and shareholder's equity was £21.4k.

This is now down to £20.4k as a result of a month's salary payments The company is 50% owned by me and 50% by my wife. The CGT allowance is £9,600, so a £19,200 capital distribution would be tax free, as I have made no capital gains this year. As a matter of fact, of the company's assets, £2,120 is plant + machinery, which is a laptop, a PC, and some networking hardware. The laptop (£1800 just over 2 years ago) is knackered but serviceable, a faster better one sold for only £400 on ebay.

The PC consists of a dodgy 20" TFT with a line down the middle, and a desktop with 2 terabyte drives, a Quad Core Q9550, and 8GB of RAM.

So I guess I could reasonably sell the lot to me for £1,000, writing off the £2120, but earning £1000.

Anyway, a capital distribution would then be perfect.

But I haven't done this before.

How complex is it? I guess it would be a matter of drawing up abbreviated accounts, or otherwise I could extend the financial year.

I don't have an accountant, I could be persuaded to use one, but it's not something I've needed before.

I did it last year and the Company was finally dissolved in February. VITAL : Ensure that you clean out the company bank account BEFORE the company is dissolved. Nobody told poor old moi that Companies House contacts your bank to inform them to freeze all assets. I am currently in the process of having to reopen the Company (costing £1000 and so much hassle regarding references you would not believe ... basically your references need references) to get the money out.

Regarding your capital distribution : the IR evidently frown upon these ..... doing one for both you and the wife may draw up a red flag ..... what does your accountant say? I wouldn't worry too much about the computer kit .... I had bought about £5Ks worth of kit in the last few years and wrote it off for £1k.

[Board Game Geek]

How to wind up a UK company

[dude69]

My company's y/e was on 4th January. I have just compiled the company's accounts and shareholder's equity was £21.4k.

This is now down to £20.4k as a result of a month's salary payments The company is 50% owned by me and 50% by my wife. The CGT allowance is £9,600, so a £19,200 capital distribution would be tax free, as I have made no capital gains this year. As a matter of fact, of the company's assets, £2,120 is plant + machinery, which is a laptop, a PC, and some networking hardware. The laptop (£1800 just over 2 years ago) is knackered but serviceable, a faster better one sold for only £400 on ebay.

The PC consists of a dodgy 20" TFT with a line down the middle, and a desktop with 2 terabyte drives, a Quad Core Q9550, and 8GB of RAM.

So I guess I could reasonably sell the lot to me for £1,000, writing off the £2120, but earning £1000.

Anyway, a capital distribution would then be perfect.

But I haven't done this before.

How complex is it? I guess it would be a matter of drawing up abbreviated accounts, or otherwise I could extend the financial year.

I don't have an accountant, I could be persuaded to use one, but it's not something I've needed before.