MVL and distribution "in Specie" of investment

[FallenSparrow]

Hello All

Just recently been reading through the posts here on MVL. I am looking to close my company as I have not worked the past year and no longer intending to do so. I have built up large reserves and the cash is invested in shares and funds. I think it will take a long time to draw down the reserves as dividends at the basic rate limit each year, or never if the investments continue to do well.

I am not sure if I am entitled to ER either, I am in the middle of finding a new accountant (not happy with current service at all) and been asking around locally in regard to accounts, MVL and ER although feedback is sketchy on MVL and ER. I would need the previous year end accounts (Jan 2020) to be done and another final set if I go ahead with an MVL, I presume.

My question however is about MVLs where I heard the distribution can be done "in specie" by some providers. E.g to quote Frost Group "We will not ask you to transfer company funds to us, instead we use the distribution in specie process...".

Has anyone completed an "in-specie" MVL, in particular with company assets such as stocks and shares? I.e. can the investments be transferred over from the Company to Director(myself) during the MVL in-specie process, i.e. the assets are not physically sold nor converted to cash. I suppose the liquidator would need to work with the broker, and also take the market value of the asset at transfer for the final company accounts as well.

Any help would be appreciated.

[cojak]

You’re going to need an MVL specialist dealing with this kind of thing. MVL Online deals only with straightforward contractors.

[Maslins]

One issue you're going to have is that the value of those investments will (unless you cash them in) continually be going up/down. Therefore there will almost certainly be some further CT disclosures to make indefinitely, until those investments are transferred out of the company.

Yes in theory a liquidator can do an "in specie" distribution. With your company's investment account this basically means establishing what the value is on a specific date, doing paperwork to show you getting a distribution for that amount (relevant for your personal tax), then presumably also doing some paperwork with the investment provider to confirm that those investment accounts can now be considered to legally belong to you personally (not the company).

Do be aware that some of the low cost online type liquidators won't tend to cater to this situation. It's doable, but adds extra complications. More traditional/high street liquidators likely will be able to.

I think this is very different to what Frost Group are talking about. I'm sure they can clarify if you ask them, but I believe what they're talking about is simply a way for clients to get cash (nothing more complex than cash) out of their company a bit more quickly. They'd get you to instigate the transfer before they're formally involved, so short term it's a director loan. Then after their appointment they'd mock up paperwork to clear that loan. Possibly they'd be happy doing that with an investment account too, but that would then involve you doing whatever paperwork is required to change the legal owner of the accounts from your company to you.

Independently of that, as you're possibly aware, you may struggle to qualify for entrepreneurs relief if you've been actively investing your company's spare funds. Don't think you'll really get a concrete answer anywhere on that.

[FallenSparrow]

Thank you for your help. I have spoken to a few liquidators and indeed it seems to be possible to distribute fixed assets (stocks and shares) in specie.

Has anyone had experience with Begbies Traynor (via Real Business Rescue) or Beacon, who seem to both offer distribution in specie?