Limited Co Closing with Assets

[BigJase]

Good Afternoon,

Friends of ours have a limited company that was quite successful until health circumstances took over.

They have decided to close it down and sign off.

The company was not old enough to have filed its first accounts yet so currently no Corporation Tax liability as been created.

Vat is all up to date.

No debts.

There will be approx £50,000 cash left in the business account.

However they were smart - the limited company holds over £300,000 of Royal Mint 1oz gold sovereigns… it is a sight to behold let me tell you.

Every time they had big chunks of money they bought sovereigns so they could rise in value.

As they are closing it down - the assets are getting split up.

Obviously there would be a personal tax liability on the cash, but where do they stand inheriting approx £150k of Royal Mint gold coins? Someone did say they are free from capital gains?

Any ideas?

Thank you

 

[Olakunle Abiodun]

Good afternoon That’s an impressive strategy with the gold sovereigns definitely a unique way to store company profits. Since the business is closing, the cash distribution will likely be subject to personal tax. For the gold coins, HMRC does treat UK legal tender sovereigns as exempt from Capital Gains Tax, which is a big advantage. However, how they’re distributed (cash vs. assets in specie) can affect the tax treatment, so it’s wise to get professional advice before making moves.

Have your friends spoken with an accountant yet to confirm the most tax-efficient way to handle both the cash and the gold?
I can share some advice on this. Feel free to inbox me and we can discuss it in more detail.