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Ash, Solicitor
Category: Property Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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I have a limited company which has not traded for 2 years and

Customer Question

I have a limited company which has not traded for 2 years and previously traded for 3 years. I have been submitting zero vat returns, and corporation returns for 2 years. I wish to strike the company off. Can I strike it off and distribute the remaining funds as capital and hence just be liable for capital gains tax. Does capital gains tax affect what PAYE tax bracket I am on as I do not wish to breach the 100K mark (I currently am close to that with salary + dividends)
Submitted: 3 years ago.
Category: Property Law
Expert:  Ash replied 3 years ago.

Alex Watts : Hello my name is Alex and I will help you with this. Please note that I am a working Solicitor and may be on and offline as I have to attend Court and meet with clients, even at weekends. As such you may not get an instant response when you reply, but rest assured I will be giving your question my immediate attention upon return You do not need to wait here as you will get an email when I reply.
Alex Watts : Have you applied for strike off yet please?
Customer :

I have not applied for strike off yet. There is 100K assets in the company which is actually a directs loan to me, which I understand must be paid back. My basic understanding is it can be paid back either by declaring a dividend or as part of winding up it would be declared as a dividend or as part of the capital distribution to save me physically paying it back only to distribute it again.

Alex Watts : You need to first distribute assets and then strike off.
Alex Watts : This is because as soon as you strike off all assets become the property of the Crown
Alex Watts : Once they belong to the Crown you can't distribute them.
Alex Watts : But as you are aware CGT will be due when you distribute.
Alex Watts : But you must distribute then strike off, not the other way around.
Alex Watts : Can I clarify anything for you about this today please?
Alex Watts :

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