TAAR when MVL of LTD because of move to Australia

I'm moving to Australia. I am closing my UK company and starting on there , will TAAR apply?

Didn't find your answer?

My Australian wife and I are moving to Australia (permanently). 

I have a LTD company here (makes apps, with wife and myself the only employees and shareholders). I have considered keeping it, but the complexities and costs related to that mean it is not practical.

Instead, I will be closing it and starting a new company in Australia (doing the same work).

I hope to access BADR through an MVL, but need an opinion on whether TAAR would apply, considering; the trade is the same, but it is in a different country and not being wound up for tax purposes (that will happen whatever).

I've asked my accountant, but in lieu of that answer and the self-assessment nature of TAAR, I'd appreciate a second opinion.

Replies (20)

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By Ruddles
10th Oct 2023 16:53

gamerdownunder wrote:
I've asked my accountant, but in lieu of that answer and the self-assessment nature of TAAR, I'd appreciate a second opinion.

What answer?
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By Leywood
10th Oct 2023 17:08

Best to pay for a second opinion then.

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Ivor Windybottom
By Ivor Windybottom
10th Oct 2023 17:32

Bruce, the TAAR rules require that "it is reasonable to assume that the main purpose, or one of the main purposes of the winding up is the avoidance or reduction of a charge to Income Tax".

Do you think one of the main purposes of your MVL is to avoid an Income Tax charge?

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Replying to Ivor Windybottom:
RLI
By lionofludesch
10th Oct 2023 17:38

Ivor Windybottom wrote:

Do you think one of the main purposes of your MVL is to avoid an Income Tax charge?

"One of" are the important words here.

Just saying.

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Replying to Ivor Windybottom:
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By gamerdownunder
10th Oct 2023 17:50

There is only one "purpose of the winding up", and that's that I'm leaving the country. I'll be closing the company whatever happens.

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Replying to gamerdownunder:
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By Wanderer
10th Oct 2023 18:02

That sounds like the reason, rather than the purpose.

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Replying to Wanderer:
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By gamerdownunder
10th Oct 2023 18:39

Are they not the same? Purpose is “the reason for which something is done”

The (reason and) purpose is: only run one company - in the country I live. not have cross-border tax complications, not pay double for various services in two places, etc.

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Replying to gamerdownunder:
RLI
By lionofludesch
10th Oct 2023 18:14

gamerdownunder wrote:

There is only one "purpose of the winding up", and that's that I'm leaving the country. I'll be closing the company whatever happens.

Well, if that's the case, you're grand.

Let's hope HMRC agree.

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Replying to lionofludesch:
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By gamerdownunder
10th Oct 2023 18:42

What would be the alternative? (Genuine question)

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Replying to gamerdownunder:
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By Tax Dragon
10th Oct 2023 20:04

Not to close the company?

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Replying to Tax Dragon:
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By gamerdownunder
10th Oct 2023 20:21

Tax Dragon wrote:

Not to close the company?


As mentioned above, I will be closing the company.
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Replying to gamerdownunder:
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By Tax Dragon
10th Oct 2023 21:35

That could be expensive. What happens to its valuable assets?

Might I suggest you wait for your accountant to reply. Your accountant has the facts and figures. We don't.

If as you hinted your accountant has already replied, but you don't like the answer, then the suggestion to ask (and pay) for a second opinion is sound. It's way too complex for meaningful advice here.

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Replying to Tax Dragon:
By Ruddles
10th Oct 2023 22:00

Tax Dragon wrote:
What happens to its valuable assets?

I suspect that they would end up in the hands of the shareholders
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Replying to Ruddles:
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By Tax Dragon
10th Oct 2023 22:03

Well there's some tax advice to pay for right there, I feel.

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Replying to Tax Dragon:
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By gamerdownunder
10th Oct 2023 22:13

Sorry, I think I missused the in lieu- I’ve not had an answer yet.

I will relay the answer here when I do.

Regarding the second part of my question. Do you (or others) know if the new trade being in a different country affects if TAAR applies?

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By richard thomas
11th Oct 2023 09:39

The new trade being in a different country does not affect the operation of the TAAR. What affects the outcome of the TAAR applying is the residence of the recipient of the distribution and what may affect whether the TAAR applies is the residence at the point of distribution of the company in MVL.

This points to a need for paid for specialist advice including on Australian tax which is no less complicated than UK tax, and can be more so once you find out about s 159GZZZZF ITA 1936 and other delights.

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Replying to richard thomas:
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By gamerdownunder
11th Oct 2023 09:42

Thank you for this.

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Replying to richard thomas:
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By gamerdownunder
11th Oct 2023 10:06

re-reading this.

At the point at which distribution is made, I will not be an Australian resident for tax purposes, and neither will the company (confirmed by Aus accountant).

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Replying to gamerdownunder:
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By More unearned luck
12th Oct 2023 15:27

What is your timetable then?

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Lisa Thomas
By Lisa Thomas - Insolvency Practitioner
12th Oct 2023 14:36

If you don't wish to pay another accountant for a second opinion, perhaps you can ask HMRC.

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