The recent Budget Announcements included changes to CGT (Capital Gains Tax) and BADR (Business Asset Disposal Relief) that was not great news for anyone closing down a business.. Unfortunately these changes were not what we wanted to hear in regards to anyone seeking an exit in the future in as tax efficient manner as possible.
If you are considering closing down your company by using a solvent liquidation/MVL (members/shareholders voluntary liquidation) you need to pay attention to the timeframes.
1. First of all, time will be needed to prepare the final full set of accounts for the directors to then settle with all creditors prior to liquidation. So the earlier the better!
2. When the company is (hopefully!) in the position of only having cash and no creditors, an MVL can be effected quite quickly.
3. When the company is officially in liquidation, a notice must be advertised to creditors for 21 days before a distribution to shareholders is allowed.
This means that any shareholders that need distribution before the 5th April must have their company in formal liquidation by the end of February at the latest. Formal liquidation means that there has been a board meeting and shareholder resolutions passed- just a signed engagement letter is not enough!
If you are considering solvent liquidation/MVL, get in touch today and we can talk you through the steps and put you in contact with some great liquidators that we work with and ensure that it is all completed by April 5th. Give us a call on 01622 738165 and the team here will gladly chat through an issues