Fisher Phillips Chartered Accountants | Spring Newsletter

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E: info@fisherphillips.co.uk | T: +44(0)20 7483 6100 | F: +44(0)20 7435 0152

Newsletter Spring 2012

Content

Lead articles...

Every silver lining has a cloud

The good seed

Late later latest

The artful lodger

Pension limits

Slicing and dicing

Company exits

Home thoughts from abroad

Business or personal?

Capital falling

Unrelieved interest

Digging up the dirt

Going quietly...

VAT...

Food and drink

Jackpot pays out?

Not so interesting

Know your supplier

Know your limitations

Law items...

Sacked or not sacked?

« Back to News

Company exits

If a company is liquidated, all the money distributed to shareholders is liable to CGT – at 10% (if Entrepreneurs’ Relief is available), 18% or 28%. If the company pays a dividend before being liquidated, that’s chargeable to income tax – taking the 10% tax credit into account, there’s nothing more to pay for a basic rate taxpayer, 25% of the net amount for a 40% payer and 36.1% of the net amount for a 50% taxpayer.

For many years, HMRC have allowed the CGT treatment where a company is informally dissolved rather than liquidated. From 1 March 2012, they are going to restrict this to distributions which don’t exceed £25,000. If the amount is more, it will all be charged to income tax – although you could pay a dividend first to leave exactly £25,000 on dissolution.

If you have a company with substantial accumulated reserves, and you are thinking about how to get the money out in the most tax-efficient way, we can advise you.