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How to obtain entrepreneur’s relief on liquidation
KEY POINTS
- The two main ways to terminate a limited company.
- Entrepreneur’s relief and the trading requirement.
- The treatment of large cash balances in the company.
- “Phoenix” companies may be caught by the transactions in securities legislation.
- Members’ voluntary liquidations will be more expensive but should ensure entrepreur’s relief.
Over the past year or so I have assisted a number of owner managers to close down their companies on a tax-efficient basis.
Many of these businesses were consultancy- or service-based with no obvious succession path or exit route. In most of these situations the owner manager has wished to “retire” and draw out the company’s funds at the beneficial 10% entrepreneurs’ relief (ER) rate of capital gains tax.
Some of these retirements were a little premature...
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