SUDDEN DEATH of my partner - Stuck in limited company with 2nd property - HELP!

anselld

buildingbee said:

Winding-up - could you please clarify:- 

- Do I not need to contact HMRC at all? 

- Does winding-up only cost £10?

- Hypothetically speaking, if I sold the company property today (to pay off the residential mortgage) and then didn't trade for 3 months, can I strike-off the company?
- Do I need to make the company dormant for 3 months before striking it off?

- Once I strike-off the company, do I still need to submit any tax returns or confirmation statements?

That is all getting way ahead.  You cannot take any steps to wind up the Company whilst it still owns the property.  If you have decided to sell the property it would be best to concentrate on that for the time being.  Get some Estate agent valuations and advice.

As said previously you may be able to sell the whole Company to an investor instead of the house itself, but that depends if it is the type of property to attract a good price from investors.  Again ask EAs advice.

MobileSaver

buildingbee said:

 So if there was money owed to the company, can they send bailiffs to our residential home to recover any costs?

I assume you meant to say "money owed to by the company"?

I have no experience of bailiffs so others may correct me but I would guess that whether monies are owed by the company or by directors personally, bailiffs would be within their rights to turn up at a director's home address but if any debt is in the company name only then they can only take company assets. What debt do you think there might be given the company has a large asset and presumably few if any expenses?

buildingbee said:

Winding-up - could you please clarify:- 

- Do I not need to contact HMRC at all? 

- Does winding-up only cost £10?

- Hypothetically speaking, if I sold the company property today (to pay off the residential mortgage) and then didn't trade for 3 months, can I strike-off the company?
- Do I need to make the company dormant for 3 months before striking it off?

- Once I strike-off the company, do I still need to submit any tax returns or confirmation statements?

Yes, you need to send HMRC your final company accounts and a final tax return and yes the strike-off fee is just £10.

Yes, you can apply for strike-off three months after selling the company property so long as the company doesn't engage in any other financial transactions in those three months. You don't need to "officially" make the company dormant for those three months, it just is dormant because you are no longer trading.

Once the company has been struck off you don't need to submit anything else to Companies House.

buildingbee said:

- If there was an honest mistake in the calculation of a transaction, can HMRC hit me with a fine and can they come after me personally?

If you make a mistake then yes HMRC can come after you personally and the penalties, if any, depend on whether the mistake was careless or deliberate as well as how significant the mistake was.

If you accidentally entered an expense as £215 instead of £125 then HMRC probably won't care, if you deliberately enter the property sale price as £30,000 instead of £300,000 then expect a large fine and possibly even a criminal conviction.

If you notice a careless mistake and bring it to HMRC's attention first then often the penalty will be zero (of course, you will still have to pay any tax owed due to the correction) whereas if HMRC find a careless mistake then the minimum penalty is an additional 15% on whatever tax you underpaid.

buildingbee

Thank you Kazwookie.

Thank you and your right anselld. I am getting ahead of myself, but I can't help but think the worst.  I've been in touch with estate agents and they said that it'll be hard to sell the company, but private is the way to go as I should be able to sell the property quite quickly at or above the price we paid and then close the company, so that's some relief for me. 

Thanks so much MobileSaver for your advice.  Your right that making it dormant has no benefit for me.  I only was thinking of the dormancy in terms of when you said that the company should not be trading for 3 months.

I will carefully double-check all transactions to make sure we've not made any mistakes.

Regarding bailiffs - We don't have any debt at all and just to be clear, we have NEVER made any purchases of items in our residential home via the limited company. Our only expenses have been company registration/confirmation submission, fuel, food, basic website, solicitors fees, mobile phone contract and the 2nd property - All these have been paid for with director's loan/mortgage to the company. But I was thinking that if it costs money to wind-up a company and we have given our residential/home address as our trading address, then could bailiffs turn up and say that any items in our home belong to our company? 

Other than the strike-off fee of £10, is there any other costs incurred that I need to be aware of?

Also is what you said below the totality of the process to wind-up/close the company? or is there more to it?

"Yes, you need to send HMRC your final company accounts and a final tax return and yes the strike-off fee is just £10.

Yes, you can apply for strike-off three months after selling the company property so long as the company doesn't engage in any other financial transactions in those three months. You don't need to "officially" make the company dormant for those three months, it just is dormant because you are no longer trading.

Once the company has been struck off you don't need to submit anything else to Companies House."

youth_leader

I'm so sorry you have all this to deal with on top of the endless admin involved after a death, keep careful records of everything you do.  Good luck.

km1500

Perhaps the most important thing you need to be aware of is the tax implications of anything you do.

You need to calculate and pay any corporation tax (if any) and ditto personal tax.

Annisele

buildingbee said:

Regarding bailiffs - We don't have any debt at all and just to be clear, we have NEVER made any purchases of items in our residential home via the limited company. Our only expenses have been company registration/confirmation submission, fuel, food, basic website, solicitors fees, mobile phone contract and the 2nd property - All these have been paid for with director's loan/mortgage to the company. But I was thinking that if it costs money to wind-up a company and we have given our residential/home address as our trading address, then could bailiffs turn up and say that any items in our home belong to our company? 

From what you've said, I think bailiffs are vanishingly unlikely. It sounds as though the only debt the company has is to you and your partner, so there's nobody (other than you) to come chasing for the company's debts. Eventually the company will owe money to Companies House (for annual returns etc) and to HMRC (if there's ever a profit) - but neither of those organisations start with bailiffs. If the company doesn't pay what they think is due, they'll send a series of increasingly stroppy letters.

One of the main advantages of having a limited company is in its name - the "limited" bit means that directors and shareholders only have "limited" liability. Unless you've given a personal guarantee, then in normal circumstances nobody can come after your personal assets for the company's debts. (Don't worry about abnormal circumstances. Google "piercing the corporate veil" if you're curious, but basically don't knowingly do illegal things and you'll be fine.)

I'm not hugely suprised that estate agents don't think they'll be able to sell the company. Estate agents sell houses, not companies - so they'll have a much better idea about house selling. But even so, if the company's only asset is the house it probably will be neater to just sell the house from the company and then dissolve the company. But make sure you do it in that order; if you dissolve the company first and then try to sell the house you'll find that you can't - you'll have accidentally given the house to the crown.

gettingtheresometime

Hi Buildingbee

I'm not sure strong is the words I'd use to describe me....I was so bloody angry at the way some of his clients acted after his death, I think I used that anger to do what was necessary. 

It sounds as if you'll have it a lot simpler than me as it will only be the house to deal with before closing the company down but I do have to warn you of two things though. 

Your husband's share of the company will have to be included for his calculating his estate and  as he didn't have a will letters of administration will have to be applied for.

secondly It took me the best part of a year to deal with my husband's affairs for various reasons, not all connected with the company but what I found was once I'd dealt with everything, grief really hit me ...it was like I'd finally had time to process what had happened.

I can't advise you what to do re the company & house but if you want to talk to some one who 'gets it' please feel free to message me

gwynlas

Buildingbee, sorry for your loss.
Regarding the company as you have already found out you have at least 12 months so this takes the pressure off you and a one off accountants fees should be much cheaper than you have been quoted and is a chargeable business expense. Regarding the property you said it is almost ready  It would be advisable to complete all works and prepare the property for sale prior to allowing an EA through the door for a valuation. Whilst they might seem very friendly and sympathetic to your needs they are in business to sell properties and earn commission quickly. Do follow advice on forum regading getting three valuations and choosing your EA carefully so that you make as much profit from it as your partner intended. Attacking overgrown gardens, cleaning and decorating call all be therapeutic. There are other bereaved people on the forum who have surprised themselves with what they have achieved and have taken strength from this.

theoretica

You might find it worthwhile talking to the bereavement section of your mortgage company - even as a joint mortgage I hope they would be able to offer some breathing space while the complications are untangled, if you need this.

MobileSaver

buildingbee said:

Other than the strike-off fee of £10, is there any other costs incurred that I need to be aware of?

Also is what you said below the totality of the process to wind-up/close the company? or is there more to it?

The only costs are the £10 fee and strike-off is a formality assuming that all your statutory paperwork is up to date and that the company has no debts to anyone including HMRC.

As others have said, you can safely ignore (apart from any statutory deadlines) the inner workings of the limited company and instead put your efforts into staging the property to sell for as much as you can, as quickly as you can.

If you can sell the property for more than you need to clear the mortgage and all the selling costs then, great, three months later you can strike-off the company and draw a line under the entire enterprise. If you can't sell for enough then at that time options can be considered for the best way forward.

The paperwork for a SPV for both HMRC and Companies House should be relatively straightforward and something you can do yourself with help from this forum and without paying a professional. Even the accounts should be simple enough to do yourself although you may want to pay an accountant for an hour or so of their time to advise on any tax issues and to do a sanity check on the accounts you have produced yourself.