Limited company account with money... Father passed away... What now?

tasticz

Hi guys,

My father passed away few days ago. He was the sole director of the company. The shares was divided between my mum and dad.

My dad's will was that everything was passed to my mum. 

I know the company has some corporation tax to pay and even after that there will be some money (big chunk for us) left in the company. We need to wind up the company as we have no use of it.


I informed my dads accountant and he recommended that I become the interim director of the company and my mum becomes 100% shareholder and she takes out the money and then we close the company after.

Is this the correct way to do it? Please advise what do you think is the best option?

Will she need to pay dividend tax for taking out the money from the company as it is part of my dads estate and there is no tax for inheritance between husband and wife?

otherwise please advice what is the best way forward. we obviously want to retain as much money as possible from the leftovers after paying the corporation tax

unforeseen

The accountant is best placed to answer questions as he would have full sight of all the paperwork

tasticz

unforeseen said:

The accountant is best placed to answer questions as he would have full sight of all the paperwork

I can also provide you with the answers to all your questions (everything) if you can help me.

edit: btw i just noticed your username. it was also an unforeseen circumstance!

xylophone

https://companieshouse.blog.gov.uk/2019/11/14/how-to-prepare-for-the-death-of-a-director/
https://www.gov.uk/liquidate-your-company/members-voluntary-liquidation
The company accountant/solicitor should be able to advise.

TheCyclingProgrammer

The first thing to do would be to take care of the company liabilities and if your mum is not best placed to do that then making you a director so you can take care of it isn’t a bad idea. 

If your mum has inherited everything from your Dad then that should make her the sole shareholder anyway.

After paying the corporation tax and any other liabilities how you proceed depends on how much retained profits there are left to distribute. This is where you need to speak to your accountant. They will need to draw up final accounts. Paying out a final dividend is a simple option but will be subject to dividend tax rates, it might not be the best option. If the amount is below £25k you could strike the company off and treat the profits as a capital gain. If the amount is higher you will need a members voluntary liquidation which will have costs. 

Speak to your accountant. 

csgohan4

As Above, you need the accountant to do all the legwork, Get it wrong doing it yourself and your setting yourself only to fail and pay more tax. 

p00hsticks

tasticz said:

Will she need to pay dividend tax for taking out the money from the company as it is part of my dads estate and there is no tax for inheritance between husband and wife?

Just to correct this - you need to think of the company as being completely separate from your dad's personal possessions.  The money in the company is NOT part of his estate - it belongs to the company, which is a separate legal entity.

His shares in the company ARE part of his estate and from what you say will be inherited by your mother.    

I'm sorry for your loss.

Cook_County

Sorry for your loss. I'd start by discussing this with the Executor(s) under the Will.