Members Voluntary Liquidation (MVL)

From £2,000 inc disbursements*

Use an MVL to liquidate your solvent company to release your assets, tax efficiently.

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Why is Voluntary Liquidation Tax Efficient?

The Old Law

Up to 1 March 2012, H M Revenue & Customs could grant a concession to company shareholders known as the Extra-Statutory Concession C16 (ESC C16) which enabled the shareholders (known as "members" under company and insolvency law) of a Limited Company to close a solvent Company without the need to appoint a Liquidator.

The Directors were allowed to distribute any surplus funds or assets to the Shareholders as Capital Receipts rather than as a Dividend.

This therefore meant that the tax on that distribution was taxed as a capital gain, rather than income, hence attracting a lower rate of tax.

The New Law

On 1 March 2012, the ESC C16 legislation was enacted. The legislation stipulates that where a company has surplus cash or assets available to distribute of £25,000 or less, the concession would be automatic under the new legislation and such distributions can be treated as a Capital Receipt by the Shareholder.

But where the Company distributes more than £25,000, it will be taxed as a dividend unless the company is placed into Voluntary Liquidation.

A solvent liquidation instigated by the directors and approved by shareholders is known as a Members Voluntary Liquidation (MVL). A distribution to shareholders by a Liquidator is treated as a capital gain and not taxed as income.

Fixed Fee MVLs

MVL Direct's online liquidation system has simplified the MVL process so we can offer low cost, fixed fees members voluntary liquidations.

inc disbursements.*
(No Hidden Costs)

* £2,000 fixed fee is only available to companies that have less than £250,000 cash in the bank and all liabilities/expenses paid.

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