Members’ Voluntary Liquidation (MVL) is a procedure that is used when a company has fulfilled its purpose, has sufficient assets to meet all of its liabilities, trading has stopped and the company’s shareholders wish to realise their investment in a tax efficient way.
The key tax benefit of an MVL arises from the fact that a distribution of assets to shareholders via MVL are treated as capital rather than income distributions. Accordingly, tax paid by the shareholders on what they receive will be based upon capital gains tax rather than income tax rates, which subject to the circumstances, can give rise to a substantial tax saving.
We support directors, shareholders and their advisors in implementing low cost MVL solutions.
If you’re interested in finding out more about the process involved in a MVL, please take a look at our steps in a members’ voluntary liquidation article.