Empower Your Business with Closing Tools Sales in United Kingdom

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closing down a limited company how do you do it and more importantly what are the things you need to watch out for check out this video as we go through all of those details uh peter johnson so if you're what you think hi peter how peter says i own two ten properties in my own name i also own a limited company that owns four which again is a standard thing that we're seeing more and more that people see in their own names i wish to close the company down via members voluntary liquidation interesting um i would sell two of the properties transferred to by our ex-specie dividend well we'll talk about that in a minute and then the insolvency practitioner would keep enough cash in the company to pay the corporation tax um on the capital gain my accountant says council so though says this is a small chance it would be um targeted by the anti-avoidance uh rules bought out in 2016 um as it still will be a letting property uh he said there are rules were not designed to catch me but they um they could do so basically um and interesting enough what we do we do an awful lot of learning ourselves um and i remember this um we're part of the charter students to choose to taxation as well as the chartered accountancy as well board and both do very good um events cio team more charging institutions taxation and there's one particular event uh where they talked about this very thing i don't know if you recall is whereby he said that any uh distribution fire capital of the shareholding where the company either buys your shares off you or liquidates in a certain fashion to use this phrase which is their specie dividend will be seen as a distribution not as a capital distribution uh and hmrc have indeed i'm not sure the year so this 2016 may be more information than i even know um but i certainly know that um the person that we was watching pretty much said don't try this at home kids um you will get caught out what's your favorite it's basically targeted anti-audience rules so something called tar and it's also referred to as well as anti-phoenixing so what it is is hmrc are saying if you close down a company and within two years do something same or similar in a either different company or in your personal name then they will classify the prior closure of the limited company as exactly as simon said it is not a capital gain instead it's considered income now what's the real difference it's cash in your pocket you're going to get taxed if it's taxed under capital gains tax it's likely to be taxed either 10 or 20 percent depending upon whether you can benefit from a really fantastic relief called business asset disposal relief and that drops it to 10 otherwise it's likely to be 20 conversely if it's classified as income which this piece of legislation focuses on kiss goodbye to up to 45 of that money as tax now which one would you prefer to pay 10 or 45 percent there is a couple of things that that was that was interesting on that point because i think what peter was saying was that he's looking to close down the company and if we break this down if you've got properties that you have sold which is then got capital gains tax and then you want to transfer over to be honest this dividend species may be caught out by inconsexurals anyway if you are closing it down and you have got money left in the bank account then you would close it down and as louis said you would have this you wouldn't get better because bada is related to trade companies and if yours is property investment then you're not going to get this business asset disposal relief anyone listening in thinking what the hell they have to talk about bada for uh bada was um is a replacement to entrepreneurs relief so if we just mention entrepreneurs relief because most people will relate to that uh but maybe not bad albeit bad it does sound a bit more interesting it's a more appropriate definition that's for sure yeah it is it is um so i think in terms of the whole closing down in the company you can certainly do what you talked about whereby you've got money left over in the company the company sells the assets and then transfers the money but it's not a dividend it's just a distribution of your capital because you've sold your shares back to the company and then the company closes down but the one thing i would say about all of that is if your cash left in the company is more than 25 000 pounds then you'll have to go through an insolvency practitioner um and they're not just what peter's talking about anyways and he's talking about a voluntary liquidation yeah it's like involve a practitioner but the thing is they're not cheap um so a practitioner of insolvency is a very niche industry so you could be paying i the last time i got equate nothing myself but someone else was 14 000 pounds and that was for a very basic similar to peaches scenario so do be careful when we're talking about liquidations and you've got lots of money in there because one of the ways around that and it's something that we advise our clients is just to take your dividends out and then when it's less than 25 000 pounds then close the company um so you might have to keep your company open for a couple of years more but is it worth it well and this is the question i think peter you might want to just ask yourself if you were to trickle feed the money out of the company in the form of perhaps salary and dividends over time then um you know literally waste away the money uh carefully taken with tax efficiency and minded your personal name rather than go through a members voluntary liquidation i wonder whether that might work better for you and might give you more tax savings we've looked at this now multiple times for clients it's a very rare beast that actually works out better value for money for them to go through if you like a practitioner to help them close down that company and it's much better to as i say my phraseology trickle feed the money out as carefully as you can with tax efficiency in mind until there's nothing left before we go any further i want to explain that there are many live events that you can register for free there are four events that's showing hk to uk to help people move from hong kong to the uk the property expert panel if you're a property investor i'm a property developer this will be very useful for you tax q a if you want to ask proactive tax questions in regards to structures and how to mitigate tax in the future and finally uk tax return q a as it says to deal with questions in relation to your tax returns before you submit it to hmrc don't forget that these events are live and will be shown on youtube the day after so why not register today start saving tax tomorrow