Closing down company in most tax efficient way

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pauric

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Does anyone have any advice on the most tax efficient way to close down a company?
There are 2 directors, husband and wife and they have a business premises worth about €250k that they would be selling and this is the main company asset that they would like to be able to minimise the tax payments on this as they close the company.
 
What was the cost to the company of buying the property? Also, when did the company buy it and what was it used for? What does the company do? Does the company have any other assets or liabilities?
 
I’m not sure exactly on the cost, let’s say for calculation purposes it cost €40k 25 years ago.

The company was in the construction industry, other assets are just a van worth maybe €10k, no liabilities.
 
There are a couple of options which could be explored further e.g. sale of shares in the company. Suggest the best course of action is hiring someone to fo a full review and talk you through the pros and cons of each
 
If you are aged over 55 you should ask your accountant & tax adviser about the capital gains tax relief 'retirement relief'.

If the premises was used for business purposes, was not an investment asset and assuming no part of the building was sub-let, there could be potentially full relief for offset against the capital gain. (Assuming you owned the shares in the company for more than ten years, you were a director for at least ten years and a full-time working director for at least 5 year of those years).

Keep an eye on timing. Strictly speaking, if chargeable business assets are sold and the company is later liquidated, retirement relief does not apply as the assets of the company consist of proceeds and not chargeable business assets, but Revenue do operate a concession that if assets are not disposed of more than six months prior to the appointment of a liquidator, the proceeds of the disposal should be treated as chargeable business assets for retirement relief.

As @BigBoots82 said, definitely worth getting advice and there are other options if the above doesn't apply.
 
As AAAContributor has advised, you should consult with your own accountant. The obvious tax angles are Early Retirement Relief, Pension contributions and Compensation for Loss of Office.

You should also seek advice on whether it is possible to sell the goodwill of the business prior to ceasing to trade. Selling a business can be particularly important if there are long term serving employees, as you may save on substantial redundancy payments.

Full details on the Members Voluntary Liquidation process can be obtained here:

Members Voluntary Liquidation

Members Voluntary Liquidation Experts. Call us confidentially on 01 661 4066 for a free fee quotation. Nationwide Liquidation Service.
www.frielstafford.ie www.frielstafford.ie

Jim Stafford
 
Hi, I am an IT consultant and a contractor and the director of a Limited Company with me being the sole employee. I am in the the process of winding down the company and will be claiming some tax free benefits under 'Loss of Directorship'. I am currently working as a PAYE employee, but may return to contracting in the future. If I started a new Limited company in the future and worked for a minimum of 3 years in that company as the director, would I the fact that I availed of 'Loss of Directorship' in a previous company affect my ability to claim Entrepreneur Relief? In other words, does Loss of Directorship affect Entrepreneurial Relief?
 
Never heard of "Loss of Directorship". Do you have a link to what you are referring to?
 
Hi Savvy, thanks - yes - it's also known as Basic Exemption (on redundancy) here

Taxation of lump sum payments

Lump sum payments in compensation for loss of employment are subject to tax. How is tax calculated and what are your entitlements?
www.citizensinformation.ie www.citizensinformation.ie
The Basic Exemption is €10,160, plus €765 for each complete year of service.
I'm wondering if I avail of that will it affect my ability to avail of Entrepreneur Relief in the future. I'm pretty sure it won't but I want to be certain.
 
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