How to calculate Members Voluntary Liquidation Tax | Tax Calculator Formula
A member’s voluntary liquidation is the formal process for closing down a solvent limited company. Your limited company is solvent if it has enough money to settle all its liabilities in full within 12 months. Liabilities include:
Unpaid bills Outstanding subcontractors’ invoices Any loans you’ve taken, for example because you’ve bought equipment for the business Tax due to HMRC Any future liabilities that haven’t crystallized yet
There are various reasons why you’d want to close down your limited company, even though it’s solvent. If you’ve decided to close your limited company, a members’ voluntary liquidation is the most tax-efficient way to do it. And if you calculate Members Voluntary Liquidation Tax it will be easy for you to pay the creditors. Calculate Members Voluntary Liquidation Tax Usually the funds distributed from an MVL will be subject only to CGT, which is just 10 per cent if you qualify for entrepreneurs’ relief. (If you don’t it may be more, but usually still less than dividend income tax). The MVL funds may however be subject to income tax under certain conditions:
Your company has five shareholders or fewer You get involved in a similar trade or activity within two years The primary aim of your MVL appears to tax avoidance If you are struggling with corporate or personal debt and unsure what the right route is to dal with your creditors, the first step is to seek professional advice. Our highly experienced professionals at Leading are on hand to help with advice on managing personal and professional insolvency matters. Contact us today and discover how we can help you.