Anybody thinking of liquidating their Ltd co. already?

[Amanensia]

For those that are married, and has a non-working spouse, there's always the option of gifting the shares over to your spouse (perhaps make up some spurious story about them selling art) and then they can continue to get a salary and pay themselves dividends. It'd save a bit of tax over doing all dividends or dividends and MVL.

Considerations

• Could HMRC look to involve TAAR, even though it is a gift of shares to a spouse - low risk?
• Is keeping the business open keep the risk alive of HMRC having money to chase should they do a review of past contracts and determine them inside - probably low risk, but not impossible

I’ve taken advice both from my own accountants and from a large firm (where I know a tax partner) and the consistent message from both was that a genuine gift of ordinary shares to a bona fide cohabiting spouse is entirely legitimate.

[Manic]

I’ve taken advice both from my own accountants and from a large firm (where I know a tax partner) and the consistent message from both was that a genuine gift of ordinary shares to a bona fide cohabiting spouse is entirely legitimate.

Interesting option. The other consideration might be keeping a company open for x years which could be investigated by HMRC. That could be tempered by not having to go through MVL and merely closing the company and thus keeping head below parapet.

[NCo]

If you had a perm offer that can start either now or at the end of March (and get paid for contracting services before April), would it be better to continue contracting until the very last day and then make the switch, or close the company and switch now?

[pscont]

The other consideration might be keeping a company open for x years which could be investigated by HMRC.

Why? Any real example of that for, say, an open company with say 3-4 years no trading, just paying dividends and salary?
In the light of IR35 next year it is by far the best to leave the LTD opened with no business for say 1-2 years. By this time it will be clear what is what and you will have generated say £8-16k loss which will be deducted next time you have turnover. And 90% of us will.
Win-win for you and f.uck HMRC.

[simes]

I won't be making any rash or rushed decisions until at least a year after it all kicks in.

By then, and probably only then, will we know what the lie of the land is.

[DeludedKitten]

Phoenixing is only an issue if I open another company, right? What if I'm contracting through an umbrella company?

If you are only ever going to work for someone else, then it's not an issue.

Where it might be an issue is if you shut down and take ER, then work for an umbrella company for a little while, and then come back to a limited company model.

[OneManBand]

If you are only ever going to work for someone else, then it's not an issue.

Where it might be an issue is if you shut down and take ER, then work for an umbrella company for a little while, and then come back to a limited company model.

To be honest, I don't see myself contracting through a limited company again. Things only ever get worse.

[dx4100]

If you are only ever going to work for someone else, then it's not an issue.

Where it might be an issue is if you shut down and take ER, then work for an umbrella company for a little while, and then come back to a limited company model.

Maybe hold back spending the saved tax and stick it in an ISA until you are totally sure you have done the right thing.

[Win]

If one wants to jump into buy to let which perhaps coincides with the time to close the ltd company. Would it possible to change the purpose of company and use the cash to deploy in BTL ?

[ChurchillKnight]

MVL could be a good option, and prove to be the most tax-efficient route, if:

• You have £25,000 or more in retained profits
• The company has reached the end of its operational life (you have and will not have any use for it)
• You will not be involved in similar trading or activity as your company in the following two years after the winding up
• If the company was not a close company at any point in the two years before the winding up date

Of course discussing your unique situation with your accountant is always advised in the first instance.

Alternatively if you think you might get an outside IR35 role at some point in the future, you can choose to keep your company open (active or dormant) while working through an umbrella in the short term. It all depends on how you want to operate and the best option for you.