Sale of Business on Retirement

The senior partner of an accountancy practice in Bristol did a deal with his junior partner to buy him out of the business over 4 years. This left him with a pot of around £750k in his limited company bank account.

If the capital was extracted by way of dividend then the usual rates of tax would have applied.

By instructing Byrne Associates to place the company into an MVL, he will receive his funds as a capital distribution upon which he will be able to offset his CGT allowance over two tax years (ie 1st April and 8th April) and also to claim entrepreneurs relief, thus reducing his rate of tax to more like 10%.

He also has the added insurance against future claims provided by the MVL.  

 

 

Recent amendments to the Insolvency Act now allow creditors to access reports via the officeholders website