Business Asset Disposal Relief /
Entrepreneurs Relief

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Creditors Voluntary Liquidation

What is Business Asset Disposal Relief / Entrepreneurs' Relief and how can it benefit you?

(Business Asset Disposal Relief was known as Entrepreneurs’ Relief before 6 April 2020.)

If you’re a business owner planning to sell up or wind up your business, Business Asset Disposal Relief / Entrepreneurs’ Relief can save you a small fortune on your tax bill.

The scheme enables entrepreneurs who are selling all or part of their business to pay just 10% in Capital Gains Tax (CGT) on profits over the lifetime of their business.

This 10% CGT rate is considerably less than the 18% (for basic rate income tax payers) or 28% (for higher rate payers) that would otherwise be charged.

If you are eligible, you can claim a total of £1 million in Business Asset Disposal Relief over your lifetime.

How to Qualify for Business Asset Disposal Relief

For a business owner to claim Business Asset Disposal Relief / Entrepreneurs’ Relief, they must meet certain conditions.

They must:

  • be an individual, rather than a company
  • work as an officer or employee of that company
  • own at least 5% of the company and have at least 5% of the voting rights. (This minimum 5% ownership must have been in place for at least 12 months prior to claiming Business Asset Disposal Relief / Entrepreneur’s Relief, or at least 12 months before the business ceased trading.)

Most of the business owners who have done an MVL with us did qualify for Business Asset Disposal Relief / Entrepreneurs’ Relief.

However, everyone’s circumstance is different. So, you should speak to your Accountant / Tax Expert. If you don’t have one, we can recommend one to you. (We don’t advise on tax issues.)

Details about Business Asset Disposal Relief / Entrepreneurs’ Relief are also available on the HM Revenue & Customs website (https://www.gov.uk/business-asset-disposal-relief).

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Client testimonials

The whole team at Clarke Bell is very prompt and helpful. The liquidation process for my company was very smooth and hassle-free. Look no further...

Umesh Singh

I needed to dissolve my company at short notice and approached Clarke Bell on the recommendation of my accountant. They were good communicators at all...

Robert Raine

Quick to respond, efficient and friendly. Just the service I wanted for my MVL. Their process guided me through the paperwork and actions I needed...

Eric Lomas

I'm very happy with the service I received from Clarke Bell in handling my Member's Voluntary Liquidation (MVL). They communicated clearly with me throughout, always...

Mark Whitaker

I used Clarke Bell Ltd following a recommendation from another accountant as a specialist for the liquidating work I required undertaking for my business, Fior...

Noel Kenny

I recently used their services to liquidate my company via MVL. The whole process was quick and easy (lot's of digital paperwork tough as that...

Gyula Borbély

Excellent service, staff have been brilliant in guiding us through this process. Any questions we had were answered clearly and quickly. The team are all...

Clive Hastings

Creditors Voluntary Liquidation

Members’ Voluntary Liquidations (MVLs)

As well as following a sale of their company, business owners can also claim Business Asset Disposal Relief / Entrepreneurs’Relief on capital distributions to shareholders when the business is closed down.

This can be done either through a Members’ Voluntary Liquidation (MVL) or through an informal winding down procedure.

Claiming Business Asset Disposal Relief / Entrepreneurs’Relief will reduce the amount of Capital Gains Tax owing upon the closing of the business.

If you close your company with an MVL, for example, and take all the remaining money in the business bank account as a capital distribution rather than a business dividend, you’ll make huge savings in tax under the Business Asset Disposal Relief / Entrepreneurs’Relief scheme.

If you’re considering selling your business in the coming years, talk to a professional accountant or tax adviser to ensure you take full advantage of Business Asset Disposal Relief / Entrepreneurs’Relief while satisfying your legal tax obligations.

If you then want to go down the MVL route, you will need an Insolvency Practitioner. That is where we can help you.

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