An MVL is a formal liquidation process which must be undertaken with a licensed insolvency practitioner. Dissolution – or company strike off – on the other hand, is an informal closure option for companies with no outstanding liabilities.
Dissolution can be achieved by submitting a DS01 form and paying the applicable fee – currently £8. An MVL is a much more involved process, and the additional time coupled with the required input of an insolvency practitioner, means it is a much more costly option.
However, when it comes to how proceeds are taken from the company, this cost could be negated in tax savings. Profits taken out of the business prior to dissolving it, will be treated as income, whereas money is taken out of the business through an MVL is classed as a capital distribution. The effective rate of CGT can be reduced even further if shareholders qualify for Entrepreneurs’ Relief.
At UK Liquidators, our service is fully partner-led and your case will always be overseen by a fully licensed insolvency practitioner.
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Entrepreneurs’ Relief is a valuable tax relief scheme which reduces your liability for capital gains tax (CGT).
A Members’ Voluntary Liquidation – or MVL – is a formal liquidation process designed as a way for solvent companies to wind down their operations.
MVLs and CVLs are both formal liquidation processes, however, there is a key difference.
If you are considering liquidation for your company, taking expert advice at an early stage is crucial. At UK Liquidators, our team of licensed insolvency practitioners are committed to providing limited company directors with the help and advice they need to make an informed decision.
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