Tax Saving On Distribution

In May 2013 we were appointed Liquidator in a the solvent liquidation of a Bristol based property development company. Within 8 month of our appointment we had successfully wound up the company and received tax clearance, resulting a return of almost £600,000 to the shareholder.

Distributions made from solvent liquidations (MVL) are capital receipts rather than income and so are subject to Capital Gains Tax of between 18% and 28% (dependant on the level of other taxable income) rather than Income Tax. If the shareholder is eligible for Entrepreneurs' relief then this is just 10% which would enable significant tax savings.

Further information as to whether you might be eligible for Entrepreneurs relief please refer to guidance on the HMRC website. 

It is important to take early advice - whilst all options are still open. The longer matters are left, the less control you will have over the outcome, and the harder it becomes to save a business