Reply to: Leaving the country, for good. Best way to get my cash out ltd?

[Jet Setter]

Listen to what rootsnall says. Paying an accountant for the right advice could save you thousands.

I'm an Aussie and know a guy specialising in the advice you're looking for. He's not cheap but the charges will be a lot less than the tax you'll save. You can PM me if you want me to pass you his details...

[rootsnall]

2. Wait until you are non resident, wind up the company and pay HMRC nothing.

An Aussie mate paid for advice and did something along these lines by moving to a tax free location for a while. It was a good while back so !? You'll have to investigate the situation at the Singapore end.

[Gonzo]

As far as I can see you have two options:

1. Close the company and withdraw all cash and assets as a Capital Gain and pay CGT on that.

You will need to apply to HMRC to apply ESC16, this saves you the expense of a formal winding up. I had no issues doing this earlier in the year but I did note that one of the accountants popped up on here saying that HMRC are looking again at this concession because they think it is being abused.

EDIT: Here is the link http://forums.contractoruk.com/941465-post6.html

Then all cash and assets are transferred to the shareholder(s) and the difference between the value and the original share purchase cost is the capital gain.

Provided that you qualify for Entrepreneur's relief, multiply the gain by 5/9, the first £10,000 (ish) per shareholder is tax free (annual CGT allowance) and you pay 18% on the rest.

I really would recommend that you get an Accountant to help you with this. You do not want to get it wrong, and the rules have all changed in the last couple of years so your missus might not be up to date with it all.

With the Relief and Exemptions this option might not work out too bad tax wise depends on how much cash we are talking about really.

2. Wait until you are non resident, wind up the company and pay HMRC nothing.

This is the seductive option but you will need to be sure you understand how Singapore will treat your company when you get there.

Some countries' tax authorities will decide that your company becomes tax resident in their country when you do. Some countries' tax authorities do not distinguish between different types of withdrawals from the company - salary, dividends or capital gains, and tax them all as income.

So you will have to check out the Singapore rules to work out if you will be better off tax wise subject to their jurisdiction or HMRC.

Of, if you become tax resident in the UK again within five years HMRC will still want the tax.



Good Luck! I love Singapore.

[Maslins]

Wait until you're non UK resident, and living in a dividend tax haven, then pay it all out as dividends...then get the company struck off.

Other option (if you want to do it all now in a not so "up yours Britain" way) is to try to get capital treatment on the drawdown. You can do that in two ways. Firstly, by having the company formally liquidated (you'll need to appoint a qualified insolvency practitioner which won't be cheap). Or alternatively, as kinda mentioned above, you can simply wind the company up and apply for Extra Statutory Concession C16 (ESC C16) which if accepted by HMRC means the funds distributed are taxed as a capital gain, rather than as dividends which they otherwise would.

For capital gains you get ~£10k annual exemption (remember if company jointly owned you'll get this each) and effective 10% tax rate on everything above that...upto £1million. If above that, it's 18%.

[smalldog]

surely its a moral obligation

[DimPrawn]

retrosepctively of course....

Dimprawn, why the hell should they pay anything if they arent going to be here to use or benefit from any of it? They will quite rightly be paying Tax in their new domiciled country as they will be using the services and directly or indirectly be benefiting from the tax paid.

It's only fair™

[smalldog]

No, it's about correctly applying the provisions of ESC16 to a company closure. Nothing to do with avoidance or anything else, merely obeying the law. If HMRC thinks that taking money out at 10% rather than 40% is wrong, it's up to them to change the rules, isn't it?

retrosepctively of course....

Dimprawn, why the hell should they pay anything if they arent going to be here to use or benefit from any of it? They will quite rightly be paying Tax in their new domiciled country as they will be using the services and directly or indirectly be benefiting from the tax paid.

[Paddy]

Start up a Panamanian business consulting company. Get the Offshore company to produce a report on advising the best way to take your company forward. The offshore company can charge your UK company for the services. I guess a report should cost about £60k?

[TroubleAtMill]

Read up a while ago on some rule about being out of the country for 5 years and then being able to get all your money out tax free. Why pay 10%?

Anyway, my answer is both suitably vague and no doubt tempting, which hopefully will lead you to speak to a tax accountant.

Are you talking about this?

Of interest, for me anyways, is the ability to take out dividends without incurring tax (but losing the 10% credit). What happens if the jurisdiction you're going to doesn't tax dividends?

TaM.

[AZZIK]

Pay for all removal costs with company funds, draw cash, etc.

Leg it. Don't bother telling Hector.

WHS

[ChimpMaster]

Read up a while ago on some rule about being out of the country for 5 years and then being able to get all your money out tax free. Why pay 10%?

Anyway, my answer is both suitably vague and no doubt tempting, which hopefully will lead you to speak to a tax accountant.

[malvolio]

Got to laugh at you Champagne Socialists snaw. Think of the public sector that needs that cash right now. Hospitals, schools, our armed forces.

Oh, it's all about maximising it for yourself. I see.

No, it's about correctly applying the provisions of ESC16 to a company closure. Nothing to do with avoidance or anything else, merely obeying the law. If HMRC thinks that taking money out at 10% rather than 40% is wrong, it's up to them to change the rules, isn't it?

[snaw]

Got to laugh at you Champagne Socialists snaw. Think of the public sector that needs that cash right now. Hospitals, schools, our armed forces.

Oh, it's all about maximising it for yourself. I see.

Indeed DP, I should volunteer to pay more than I'm legally obliged too, to satisfy you're imagined view of my politics etc.

Anyway, I always figured this is a serious kinda part of the forum, so why not stick to bagging me in General, instead of acting like a cock here?

[DimPrawn]

Guys,

What's the best way to get the cash out of my company, and minimise by tax?

Cheers all.

Got to laugh at you Champagne Socialists snaw. Think of the public sector that needs that cash right now. Hospitals, schools, our armed forces.

Oh, it's all about maximising it for yourself. I see.

[DaveB]

OK, I'll check out the legislation.

Don't wanna pay an accountant, my missus normally does it all for us, she's an accountant by profession (Just doesn't do it any more, apart from our books). Any idea where I could look for that?

No offense to your Missus but get a professional to do it. They know the legislation, they know all the in's and out's, and if they cock it up you have some comback.

£250 for saving 30% in tax, assuming it puts you into the top rate, on what you want to get out of the company seems like a good deal to me.