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.

 

[jojo399]

Your friends need to be very careful. While Royal Mint sovereigns are indeed exempt from CGT for individuals, extracting them from a Ltd company is a completely different story. HMRC will view the transfer of those coins as a distribution of company assets at Fair Market Value, triggering massive tax liabilities if handled incorrectly.

With over £350k total in cash and gold, a simple Strike Off won't cut it. They absolutely need an MVL (Members' Voluntary Liquidation) to qualify for BADR (Business Asset Disposal Relief) and pay just 10% tax. I was in a similar spot last year trying to extract high-value assets during a closure and was paranoid about an audit. I ended up using Director First to manage the entire process. They structured the asset extraction safely, cleared everything with HMRC, and made sure I didn't get hit with massive penalties. Definitely don't DIY this kind of volume.