Hi,
Just got a couple of things I wanted to raise in regards to some MVL scenarios, and im interested in knowing peoples thoughts on both of them. You'll be able to figure out from these that Im one of life's worriers :-)
What happens if someone starts the MVL process off now, and the initial, or subsequent distributions only get transferred to the directors personal accounts after the start of the new tax year? Im assuming that each distribution would be taxed on the self assessment year that the distribution was made, rather than when the MVL process started. Now this isn't necessarily a major issue in my mind, but what if on the next Budget date (March 11th), significant changes are made to ER or Capital Gains Tax values? People would then be in a scenario whereby they couldnt be confident of the tax they were going to be accountable for when they started the MVL process. I personally think changes to Capital Gains Tax are unlikely, but I'm not 100% confident that ER will remain intact.
I've spoken to a number of liquidation specialists so far , MVLOnline having impressed me the most, but it's interesting that there seems to be multiple approaches to the actual liquidation process amongst the companies. From people I've spoken to I've identified at least 3, there may well be more, but im interested in peoples opionions on pro's and cons of each.
Process 1 - Seems to be the most common.
Process 2
Process 3
Process 3 would appear to be the quickest and on the surface carry the least amount of risk, but why aren't other liquidators following this pattern? Is there a potential downstream issue with this, or do the liquidators carrying out Process 1 or 2 assume there could always be more than 1 director.
Process 2 would be preferrable to Process 1 as it would reduce the time for the initial distribution, but if the director is making the transfer from the limited company account to the liquidators account, doesn't this then carry a significant risk?
Anyway, thoughts on the above would be appreciated.
Just got a couple of things I wanted to raise in regards to some MVL scenarios, and im interested in knowing peoples thoughts on both of them. You'll be able to figure out from these that Im one of life's worriers :-)
What happens if someone starts the MVL process off now, and the initial, or subsequent distributions only get transferred to the directors personal accounts after the start of the new tax year? Im assuming that each distribution would be taxed on the self assessment year that the distribution was made, rather than when the MVL process started. Now this isn't necessarily a major issue in my mind, but what if on the next Budget date (March 11th), significant changes are made to ER or Capital Gains Tax values? People would then be in a scenario whereby they couldnt be confident of the tax they were going to be accountable for when they started the MVL process. I personally think changes to Capital Gains Tax are unlikely, but I'm not 100% confident that ER will remain intact.
I've spoken to a number of liquidation specialists so far , MVLOnline having impressed me the most, but it's interesting that there seems to be multiple approaches to the actual liquidation process amongst the companies. From people I've spoken to I've identified at least 3, there may well be more, but im interested in peoples opionions on pro's and cons of each.
Process 1 - Seems to be the most common.
- Liquidator requests funds from the Limited Company bank account(can be time consuming)
- Liquidator makes initial distribution (percentage varies from company to company)
- Time passes, HMRC make confirmation of the liquidation
- Liquidator makes final distribution
Process 2
- Liquidator requests limited company sends funds to the liquidators holding account (would appear to be quicker)
- Liquidator makes initial distribution
- Time passes, HMRC make confirmation of the liquidation
- Liquidator makes final distribution
Process 3
- Liquidator informs Limited Company that they can transfer funds from the limited company directly to the directors personal account, but as a capital distribution
- HMRC makes confirmation of the liquidation
Process 3 would appear to be the quickest and on the surface carry the least amount of risk, but why aren't other liquidators following this pattern? Is there a potential downstream issue with this, or do the liquidators carrying out Process 1 or 2 assume there could always be more than 1 director.
Process 2 would be preferrable to Process 1 as it would reduce the time for the initial distribution, but if the director is making the transfer from the limited company account to the liquidators account, doesn't this then carry a significant risk?
Anyway, thoughts on the above would be appreciated.
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