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. 

I always recommend clients requiring specialist insolvency advice speak to Byrne Associates as I am confident that they will receive, empathetic and appropriate advice, reflecting well on my practicePeter (PB accountancy )