New Tax Rules for Members’ Voluntary Liquidations – Deadline 5th April 2016

The UK Government is concerned that the current capital distribution regime is being used as a tax avoidance measure and therefore has brought about new legislation, effective from 6th April this year, which will impact companies who are distributing funds to non-corporate shareholders using the MVL process.

From 6th April 2016 a MVL process cannot be used for tax advantage purposes and the beneficiaries of a distribution cannot be involved in a similar trade or business for two years after the distribution in order to qualify for the distribution being treated as a return of capital.

Distributions from an MVL process not meeting the above criteria will be considered as income rather than capital so act now to ensure the the MVL process can be implemented and funds distributed before the deadline in order that shareholders benefit from a capital distribution.

Please contact Hayley Maddison or Andrew Weston for further information and/or a quotation to place a company into Members Voluntary Liquidation.

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