If your client is considering closing down their company and wants to solvently liquidate in this financial year – you’re running out of time!
What is a Solvent Liquidation?
A solvent company that has ceased to trade is wound up using a formal liquidation process and an insolvency practitioner is appointed.All liabilities will have been paid in full, and the company should have assets, whether cash or physical assets, which need to be distributed to the members.
Why would my client want to Liquidate?
In the right circumstances, members in a solvent liquidation can withdraw their profits from the business at a lower rate of tax, as it’s chargeable as a capital distribution rather than as income.The capital gain may qualify for 10% business asset disposal relief (otherwise known as entrepreneur’s relief) – the saving can be significant!
My client is interested – what do I do next?
Call us on 01702 344558 and ask for ‘MVL advice’.
We can then arrange a telephone call, zoom call or face to face meeting to discuss further.
