Private Ltd Co to Permanent

loonygooner

Can anyone offer any advice concerning winding up a Private Ltd Co. I have been offered a Permanent job and need to therefore wind the company up, is their a 'best' way to do this. How can I get a maximum benefit financially from this (new house to buy as job is long way from present one).

cash99

It is possible to extract any profits in the business as a return of capital when you close down a ltd company, and potentially save tax. It would depend on your circumstances.

You do not need to go through a formal, and expensive liquidation process, as there is an HMRC concession which allows money taken out of the company to be treated as a capital distribution, even though legally it is not.

You can then have the company struck off at Companies House.

There may also be other planning opportunities so seek professional advice now.

loonygooner

cash99 wrote:

It is possible to extract any profits in the business as a return of capital when you close down a ltd company, and potentially save tax. It would depend on your circumstances.

You do not need to go through a formal, and expensive liquidation process, as there is an HMRC concession which allows money taken out of the company to be treated as a capital distribution, even though legally it is not.

You can then have the company struck off at Companies House.

There may also be other planning opportunities so seek professional advice now.

Cheers cash99. Sounds complicated, does 'return of capital' mean paying myself a dividend? I also have the problem of not knowing how much to leave in the account to pay the Taxman, all seems very messy

cash99

A dividend would be classed as income for tax purposes. A payment from the company classed as a return of capital would be capital for tax purposes.

The idea is to extract profits from the company as capital rather than income, to take advantage of the annual capital gains tax exemptions, and buisness asset taper relief, which after 2 years effectively reduces the tax rate by 75% to a maximum of 10% for higher rate tax payers. This can be done fairly easily when closing a company.

There are a number of planning opportunites when closing a company. Professional advice will probably save you much more than it costs.