Considerations for business exit through MVL

Steve Markey Leonard Curtis

In this period of increasing living costs and taxes, when closing down a business it is important to understand tax implications when extracting funds from your company.

The standard way to extract funds is by way of dividend. Dividend tax rates are as high as 39.35 per cent.

One would ordinarily take the funds out by way of dividend and then at some point, strike the company off, whereby it is then dissolved at Companies House.

An alternative way to dissolve the company is by entering a solvent liquidation, also known as a members’ voluntary liquidation (MVL).

By doing so, you can take advantage of extracting your funds at capital tax rates, which are lower than dividend tax rates.

If you utilise a tax relief called Business Asset Disposal Relief (BADR, formerly known as Entrepreneurs’ Relief), then you can extract up to £1,000,000 at a tax rate of 10 per cent, so you pay £100,000 in tax.

If you took this out by way of divide the tax would be £377,000. So you are instantly saving £277,000 in tax by extracting the funds by way of MVL.

Another advantage of MVLs is that they are dealt with by a liquidator who specialises in making sure that the company is dissolved in the correct manner.

Therefore, if you are considering selling your company’s business and assets, retiring, or you simply want to start afresh in a new sector, an MVL is a tax-efficient way of achieving this.

Enjoyed this? Read more from Steve Markey, Leonard Curtis

Latest news

1

Double delight for Vincents two newest solicitors Beth Laws and Yasmine Dragan at Vincents Solicitors’ office in Winckley Square Preston

Double delight for Vincents two newest solicitors

14 Feb 2025

2

Bowker Motor Group celebrates record number of apprentices in 40 year history Bowker Preston BMW Apprentices.png.png

Bowker Motor Group celebrates record number of apprentices in 40 year history

13 Feb 2025

3

FWP transforms Health-Based Places of Safety for NHS trust One of the Tameside suites

FWP transforms Health-Based Places of Safety for NHS trust

13 Feb 2025

4

Pleasure Beach partners with industry giant Coca-Cola Blackpool Pleasure Beach

Pleasure Beach partners with industry giant Coca-Cola

13 Feb 2025

5

Prestigious honour given to Mark Birchall at Michelin Guide Awards Mark Birchall Courtesy Michelin

Prestigious honour given to Mark Birchall at Michelin Guide Awards

12 Feb 2025

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
Skills Bootcamp in Procurement - Cohort 3
Blue-Modern-Land-Travel-Youtube-Thumbnail-2-1024x576.png.png
LBV Hub Awards
14 Jan 2025 - 18 Mar 2025

Skills Bootcamp in Procurement - Cohort 3

Community & Business Partners CIC, Blackburn, BB2 3UA

09:30 - 13:00

CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

Understanding & Preventing Sexual Harassment - Creating Safe & Respectful Workplaces
Supporting Women's Health in Your Teams A Path to Success-3.png.png
LBV Hub Webinar
21 Feb 2025 - 21 Feb 2025

Understanding & Preventing Sexual Harassment - Creating Safe & Respectful Workplaces

*, Online, *

12:30 - 13:30

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

Women's Health champion training
Supporting Women's Health in Your Teams A Path to Success-6.png.png
LBV Hub Webinar
26 Feb 2025 - 26 Feb 2025

Women's Health champion training

*, Online, *

10:00 - 16:00

Level 3 Emergency First Aid at Work Course - In Person
RKMS ACADEMY LOGO - BLACK AND ORANGE.png.png
LBV Hub Webinar
26 Feb 2025 - 26 Feb 2025

Level 3 Emergency First Aid at Work Course - In Person

RKMS Group , Blackpool, FY42DP

09:30 - 17:00

Employment Law, Tax and Payroll Update - East Lancashire
PM and M event
LBV Hub Seminars
26 Feb 2025 - 26 Feb 2025

Employment Law, Tax and Payroll Update - East Lancashire

Accrington Stanley Football Club, Accrington, BB5 5BX

08:00 - 10:00

Preston Freelancer Meet-Up: February
Freelancer Meet-Up Feb.png.png
LBV Hub Networking
26 Feb 2025 - 26 Feb 2025

Preston Freelancer Meet-Up: February

Society1 Coworking Space, Preston, PR1 3LT

10:00 - 11:30

StackedX with PM+M and CFO Techstack
LBV Hub Seminars
27 Feb 2025 - 27 Feb 2025

StackedX with PM+M and CFO Techstack

Red Hall Hotel, Bury, BL9 5NA

08:00 - 10:00

Kickstart Networking - Crazy Golf at Level, Preston
Kickstart Crazy Golf.png.png
LBV Hub Networking
27 Feb 2025 - 27 Feb 2025

Kickstart Networking - Crazy Golf at Level, Preston

Level, Preston, PR1 1HT

16:00 - 18:00

Post Employee Ownership Trust: What's the story?
LBV image.jpg.jpg
LBV Hub Seminars
04 Mar 2025 - 04 Mar 2025

Post Employee Ownership Trust: What's the story?

Brabners, Preston, PR5 6AW

11:00 - 12:30

North West (Preston) Finance Leaders Networking Event
MHA-BTI Logo_black (002).jpg.jpg
LBV Hub Networking
05 Mar 2025

North West (Preston) Finance Leaders Networking Event

Farington Lodge Hotel, Stanifield Lane Farington, Preston, PR25 4QR

08:00 - 10:00

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV120 Online Graphic 1
Subscribe now

Weekly news bulletin