Published: 17/02/2025 By Hannah Duncan
In a world of continuous deadlines, this is a gentle reminder, in particular for accountants and business owners, of the upcoming change to Business Asset Disposal Relief (BADR) that will take effect from 6 April 2025, increasing the tax rate on qualifying gains from 10% to 14%.Why Act Now?
Business owners planning to close their company in order to extract funds in the most tax-efficient way would ordinarily consider the Members' Voluntary Liquidation (MVL) route. MVLs allow distributions to shareholders to be taxed as capital gains rather than income, enabling access to BADR at the current lower rate of 10%. However, this will shortly change.
Key Benefits of Placing a Company into MVL Before 6 April 2025:
✔ Lower Tax Rate
Complete an MVL before 6 April 2025, to secure the 10% BADR rate, avoiding the jump to 14%.
✔ Tax-Efficient Extraction
Distributions through an MVL are taxed as capital gains rather than income, providing significant savings.
✔ Smooth & Compliant Process
Our team handle the process efficiently, ensuring compliance with all legal requirements.
Time is Running Out
With less than two months left before the 6 April 2025 deadline, it is critical for business owners to act immediately. The MVL process is complex and therefore requires assistance from an Insolvency practitioner.
Our specialist team have extensive experience in dealing with MVLs and are ready to guide business owners through the MVL process ensuring the most tax-efficient outcome. Please do get in touch for an initial free and no obligation consultation.
💬 Contact us today
📧 Email us: insolvency@turpinba.co.uk
📞 Call us: 0208 661 7878