need some advice - moving abroad...help please!

[britty333]

New here and really could do with some advice, my accountant is not much help and i need to change.
I have a limited company of which i am the director and only shareholder. Without using this years allowance there is around £140k in the company account.
Im moving over to Qatar (tax free country) in the next few weeks.
Trying to figure out the best course of action to try and take the money out but i'm really not sure:
1) leave it it and withdraw approx £40k/year but will obviously take a while so not ideal
2) Wind down the company with an insolvency practitioner and do a MVL, and hope i can claim entrepreneurs relief at 10% CGT. Ive been quoted £2.5k all in for this.
3) Try and use my non-resident status (achieved after i think 1 full tax year abroad??) and tax out all the cash without incurring any tax - not sure if this is even an option?

Any thoughts much appreciated.

[Gonzo]

New here and really could do with some advice, my accountant is not much help and i need to change.
I have a limited company of which i am the director and only shareholder. Without using this years allowance there is around £140k in the company account.
Im moving over to the UAE (tax free country) in the next few weeks.
Trying to figure out the best course of action to try and take the money out but i'm really not sure:
1) leave it it and withdraw approx £40k/year but will obviously take a while so not ideal
2) Wind down the company with an insolvency practitioner and do a MVL, and hope i can claim entrepreneurs relief at 10% CGT. Ive been quoted £2.5k all in for this.
3) Try and use my non-resident status (achieved after i think 1 full tax year abroad??) and tax out all the cash without incurring any tax - not sure if this is even an option?

Any thoughts much appreciated.

You need specialist advice from someone that understands both the UK tax regime and the regime in the UAE. A UK accountant will probably not have enough knowledge to help (why would they?)

Two things that will have a bearing on exactly what you do are

are you leaving the UK permanently?
how will the new country view your UK ltd company?

It is important to note that your UK Limited Company can change residency too - as well as you. Some countries will take the view that your company becomes resident in their jurisdiction at the same time that you do, other countries don't care.

If you can be certain that neither the UK or the UAE will tax the dividend income then I would go for one large dividend to clean out the company (option 3) rather than the capital distribution route (I believe that you have to stay out of the UK for longer to make that work) but I think that it is harder to 'take a year out of the UK for tax purposes' than it used to be.

I ended up going the capital distribution route and paying CGT in the UK because 1. it was easier and cheaper to do that then, 2 the country that I moved to would have viewed my company as resident in their jurisdiction, 3 although there is no CGT in my new country they would have disregarded the capital distribution and taxed that money as income.

Anyway, even though I have done this myself I am no expert, and tax rules change so you have to find someone that is!

[britty333]

At this stage I'm not sure how long I'll be out there. I'm aiming for at least one whole tax year - so until April 2014 so I can avoid any tax on my overseas income.

I'd prefer the insolvency route and have a fairly reasonable quote to have it done. The problem I'm having is with my accountant. He's not giving me any assurances that I will qualify for entrepreneurs relief - unless I use his particular insolvency practitioner to do the MVL!!
From my own research I'd say that I do (12 months ownership/employment, personal company (5% rule) and trading company.)

Does the MVL have to be done in a "certain way" with him checking over everything, so I qualify for entrepreneurs relief - as my accountant is telling me?

Feel free to pm me if anyone can speak to me privately/over the phone about this one.

Thanks

[Greg@CapitalCity]

Hi britty333

The Entreprenuers Relief (ER) rules are pretty simple, and from what I see you have read them, and understand. There is no 'special way' for the MVL to be done for these rules to apply. The process is pretty simple - something like;
(1) Make contact with your Insolvency guy a couple of weeks before you intend to engage their services;
(2) Get your final accounts filed with the HMRC, and pay all taxes due;
(3) Hand the company over to the liquidator, and once they are satisfied all creditors have been paid, you will get your final dividend payment from the liquidator (who will at this point have control of all your company funds);
(4) As you have been through the MVL process, and assuming ER applies, that final dividend is taxed as if it were a capital gain in the UK;

Just check with your Insolvency person as to what exactly they require to satisfy themselves all creditors have been paid.

[satiated]

Greg - after turning over the company and control of the bank account with its large balance, how do you have confidence that the liquidators are not going to run off with your money?

What recourse do you have if they do indeed run off with it, or pay you less than you think you should get?

[Greg@CapitalCity]

Greg - after turning over the company and control of the bank account with its large balance, how do you have confidence that the liquidators are not going to run off with your money? What recourse do you have if they do indeed run off with it, or pay you less than you think you should get?

Classic! You know, I don't actually know the answer to that. I will find out what the IP that we use says, and let you know.

[Greg@CapitalCity]

Classic! You know, I don't actually know the answer to that. I will find out what the IP that we use says, and let you know.

Nothing startling to report unfortunately. Each job is bonded (the cash in the bank is insured), and the IP has professional indemnity insurance.

[geoff from contracta IOM]

If you have left the UK permanently and established that you are no longer tax resident, there are tests for this, then you can draw the dividend tax free but there are certain restrictions, PM if you want the details for an accountant who can talk you through this in detail.