Closing business, how to enter on tax return

curtis122

Background…I'm employed and work for a company, own a rental and alongside this myself and a friend setup a company several years ago which we were both setup as directors. Fast forward this company made a bit of money which went into the company account we never took a wage from it.

We now have closed down the company in 2025 and took the money out the company account, 10k each.

I'm now doing my tax return, how will this get entered given I owned it and was a director but never took a salary. I never entered anything on any previous tax returns for it, as this was the case, there was no income. Now there is an amount paid to us.

We are claiming Business Asset Disposal on the amount as the company got closed and I am selecting the 'Capital Gains' section of the form to fill in.

Do I just fill in my take return as normal as I have been doing for my rental and employment and then just complete the Capital gain section for this money I got from the closure of the company.

Isthisforreal99

Or ask your accountant. What makes you think the money you are taking out falls under Caputal Gains?

curtis122

We don't have the accountant anymore once we closed the business. It falls under capital gains, as its a gain from a business that was closed, after paying the accountant and closing, this is what we have left as profit.

curtis122

Is there any explanation to this?

curtis122

If you have LESS than £25,000 leftIf the total amount left in your business account is £25,000 or less, you can use the much cheaper Voluntary Strike-Off (Dissolution)

• The Process: You simply withdraw the funds directly to your personal account as a final capital distribution, pay off any outstanding company bills, and then submit a DS01 form to Companies House.
• The Tax Reality: HMRC automatically allows closures under £25,000 to be treated as capital distributions. You will report this on your Self Assessment tax return and claim your 18% BADR rate without needing a liquidator.

Just found this and this is exactly what happened so how am I wrong? Please explain?

@Isthisforreal99 I see you have deleted your post, so I take it 'you were wrong'!

sherlock228

https://forums.moneysavingexpert.com/discussion/comment/82137138#Comment_82137138

is the correct answer for the two 10k amounts.
Has the company bank now literally got £0 balance? If that accounts for all the balance in the company account then that is the end of it as far as your tax return is concerned, all that remains is to pay the CGT on your tax return.
indeed waiting until under 25k remains is a very standard approach recommended by accountants when finally liquidating a company that has only a few shareholders

(Note to be pedantic the 10k belongs to your role as shareholder, not your roll as director. I take it you were both 50/50 shareholders.)

curtis122

Yes the company account has zero balance and yes we both had equal share/split.

Thank you for the confirmation.