How to Extract Your Cash From Your Company at 10% Tax

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How to Extract Your Cash From Your Company at 10% Tax

If you have a trading company it is possible to extract the cash or other value from it with only 10% tax.

What you need is a commercial reason for bringing the company to an end. It's then possible to end the company and extract all the value as a capital gain rather than a dividend. With full business asset taper relief you would only pay 10% tax.

To wind the company up formally involves appointing a liquidator, having creditors meeting, etc and can be costly.

However, these is an extra-statutory concession C16 that allows you to get HMRC agreement in advance and wind the company up far more simply. You will be able to just pay off the debts of the company then take the value out of the company and apply to Companies House to have it struck off (costs £10). It is normally straight forward to get HMRC approval to the extraction being treated as a capital gain rather than a dividend. You will have to give certain undertakings such as paying any tax that is due.

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