Can a director shareholder claim redundancy tax relief for loss of office?
Summary is as follows:-
Client owns Limited Company with wife and is director of the company. The trade was sold as a going concern a few months ago - he did not transfer with it to the new owning company.
He has been collecting remaining debtors / paying creditors and we are now seeking to bring company down to a close, probably under ESC C16.
Can he claim that he is now redundant from the company, and receive redundancy pay under the £30,000 exemption?
How would it work if....
A friend has a similar company with 20k cash and no trading activity
He is a pensioner and has had it for 5 years and not taken a salary or dividends
Can he just make himself redundant and pay the cash out ?
Would there be any tax implication
Definately not
Sorry for not been much use because I cannot remember where to point you to to get the confirmation that you definately cannot claim the £30K tax free.
Director's Redundancy
Does anyone else have any clairification by chance ?
I also have a Company that has closed due to the downturn in trade and the assets have been sold (machinery) generating quite a large balance in the bank account. There is a Director's loan that can cover most of this balance but it would be useful to claim redundancy for the husband and wife Director's who have been on the Company payroll for many years, albeit at not a great yearly salary.
There is therefore no trade left and the Company will be dissolved (without the need for ESC16 clearance) as soon as the bank funds have been distributed - hopefully in part by way of redundancy
Any views on the validity of this would be appreciated
broadly yes
Yes - but you will need to get your arguements and documentation and details sorted out as HMRC may well challenge it. But that does not mean that they won't back down if you have good sound reasoning.
Be careful about who will be the director and run the rump ofthe company after he has been made redundant.