How to close down your limited company in a tax efficient way


Donald McNaught

Donald McNaught

Restructuring Partner


If you are a contractor operating through a limited company and you have plans to retire soon or you are perhaps returning to a permanent staff position, it’s important to review your options to ensure you close down your company in the most tax efficient way.

Closing your company using a Members Voluntary Liquidation (MVL) could be the most efficient option for you: 

  • Extract the reserved funds of the business in cash.
  • Pay only 10% tax and also use CGT allowances.
  • The process is very quick - can be completed within weeks.

Criteria to use an MVL

  • Reserves around £35,000 - after paying all final liabilities.
  • Company has traded over 12 months.
  • Shareholders are directors or employees.
  • Unlikely to trade again via a company within 2 years.

It may be that you do not meet all the criteria above but an MVL may still be beneficial to you.  Some of the tax treatment may change but each shareholder’s outcome will depend on their individual circumstances.

Why not check out our calculator to see what you could save and get in touch with the team to find out more