Liquidating assets company
Unless the company plans to use this cash to start a new business venture, of course, the question is how to get the cash out. If the company pays the cash out to its shareholders as a dividend, they will suffer income tax at 25% on that dividend (assuming they are higher rate taxpayers).The alternative is to wind up the company and distribute its assets to its members.A fine line exists between definitions of a corporate liquidation and dissolution.But for tax purposes, the defining line can make a big difference.If there are any company debts still owing, these are written off when the company closes.Any debts that you owe personally, for example if you have given a personal guarantee, will still need to be paid by you.This will be treated as a disposal of their shares for CGT purposes, and so they will pay CGT based on the cost of their shares, and how long they have owned them.GOLDEN RULE: Do not assume that liquidation will always be better than a dividend.
However with these options there will always be the worry of a creditor chasing you for their owed company.Consider the following case study: Propco Ltd is a property investment company, set up two years ago by Steve, who is the sole shareholder. He pays income tax at 40% as he has a well paid job. After selling all its properties and paying all its tax, Propco is left with £700,000 in the bank, and no other assets or liabilities.Steve and Jane decide to get the cash out of the company.uk offers a No Asset Liquidation package that gives you all the support of a liquidation process but without the large fee.You will receive initial advice direct from a Licensed Insolvency Practitioner and have a qualified Case Manager appointed to your case should you wish to proceed.
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Your company will need to have some money or assets that can be sold to pay the IP's fees.