Email David Kirk direct by clicking on his name.

Close this search box.

Tax Advice For Members Voluntary Liquidations

Last updated: August 12, 2021

The quick answer

A Members’ Voluntary Liquidation (or “MVL”) is an efficient way for solvent companies to turn reserves into capital gain and pay just 10% tax. Shareholders who own more than 5% of the ordinary share capital of a company can usually claim Business Asset Disposal Relief.

This means you pay Capital Gains Tax at just 10% on the first £1 million you receive from the sale of your shares. It is worth checking this first though with your tax advisor or accountant before you start the MVL process. 

In more detail

Key Tax Advice

Do not get caught by the tax settlements legislation. MVLs are designed to be used on selling up and retiring from that type of business. If you start the same business again within two years you may lose the Business Asset Disposal Relief.

Also note that in these cases HM Revenue and Customs may think the “Goodwill” of one business has been transferred from the old one to a new one and will tax you on it. Sometimes companies use a Section 110 Scheme of Arrangement to re-organise the ownership whilst saving tax. This is a type of MVL.


In short no, you cannot. It is only available for a limited company. A company is a separate legal entity for tax purposes. Quite often businesses trade through a limited company because the Corporation Tax rate is lower at just 19% than profits taxed on an individual at up to 45%.


A Word OF Advice

An MVL is a really effective way of reducing your tax bill on retirement, but we do not think it will last forever so if you are ready to proceed with an MVL, now is the time to do it before the law changes.


If you need insolvency advice the earlier you talk to someone like us the better as you will have more options. We can help, contact us today.

More questions in this section

Author: David Kirk - ACA FABRP
Everything you need can be done online.
No need to meet anyone in person.
We cover all of England and Wales.
Just a quick email to say a heartfelt thank you for your very calm, considered, expert advice regarding my circumstances on Tuesday. Things looked bleak before you explained my options much more clearly, in simple layman’s terms.
Rob Elliott (14th December 2021)



Sign up to our newsletter

Request a callback

Simply fill out the short form below and I will get back to you.

David Kirk Portrait

David Kirk

Licensed Insolvency Practitioner