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Leaving the UK 4 australia - winding up LTD company

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    Leaving the UK 4 australia - winding up LTD company

    Hi folks,

    Apologies if this has already been asked - i have searched the forum but cant find it discussed.

    I am thinking of winding up my uk ltd company and moving to oz (my wife is an aussie) and i have some retained earnings in our UK LTD company.

    i have been told that if i shut down the company, declare myself no longer a tax resident, pay any corporation tax owing on the money, then i can take the money out of the company tax free.

    if i then transfer the money to our bank account in oz and then some months later arrive in oz (via a nice sunny country with a good beach and cheap beer).

    the thinking is then that as neither my wife or i are aussie tax residents when we transfer the money into oz, so when we later become aussie tax residents, the money isnt counted, and we dont pay any tax in australia either.

    This sounds too good to be true - has anyone done this?

    your wise advice appreciated, and swapped for a beer if you visit down under!

    cheers

    greg

    #2
    The tax free payment amount upon windup is £9,200

    Comment


      #3
      Originally posted by JKnz View Post
      The tax free payment amount upon windup is £9,200
      No - £9,200 is the capital gains allowance.

      If you are going for the Capital Distribution/Taper Relief ESC C16 dispensation thing then you get a bunch more relief.

      Greg - if you've had the company more than two years then you can apply for Extra Statutory Concession C16 which basically means you can take all the money out of your company as capital distribution and pay capital gains tax on your personal profit rather than it being treated as dividend income.

      The shares in your company count as business assets and provided you have held them for > 2 years they qualify for 75% taper relief.

      Do some research on ESC C16 and taper relief but this basically means if you have £100K in company when you close down you take the money out as a capital distribution and pay less tax than if it had been taken out via dividends.

      You get 75% of the distribution tax free (£75k) and of the remaining £25K you knock off £9,200 as your annual capital gains allowance and pay tax on the remaining £15.8K.

      If your shares are split with your wife it's even better as you can utilise both your CG allowances.

      Note you have already paid 20% Corporation Tax via the company so its not completely tax free.

      You need to speak to an accountant really for more detailed advice.

      Also this capital distribution/taper relief option applies even if you weren't leaving the country. If you are leaving the country too there may be some even better ways to take the cash out. Again, best really to speak to an accountant about this.

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