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Winding up a Ltd Company - ESC C16 / MVL etc

Winding up a Ltd Company - ESC C16 / MVL etc

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Looking at winding up a Ltd Co for a client who only traded for a short period (4 months).

Undistributed reserves of £21k but would not qualify for ESC C16 due to being less than 12 months.

Has large PAYE salary so any dividends would be taxed at 25%.

In these circumstances would an MVL and claim for ER be suitable?  I do not have a massive amount of experience of this so would like an opinion.

thank you for your time

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By Portia Nina Levin
03rd Nov 2015 12:51

What is ESC C16? And what is the relevance of 12 months to it?

You cannot claim ER whatever rout you go, as the company did not trade for 12 months.

Which does the client prefer, 25% tax or 28% tax?

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By stratty
03rd Nov 2015 13:03


What was ESC C16 now replaced by CTA 2010 s1000?

In any case I was not aware that ER applies to the 12 month period and when I researched that on the rather unhelpful website no timeframe is mentioned for the disposal to be qualifying.

Obviously the 28% CGT rate is going to be more beneficial than the 25% dividend rate once taking into consideration the CGT exemption.

Thank you PNL for the comments.

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