Liquidation maximises returns

How removing property from a liquidation helped shareholders maximise their return on investment.

The situation

The 82-year-old director and majority shareholder in an oil refinery and depot business decided to retire. The main refinery and depot business had already been sold, but the remainder of the family-owned business needed to be brought to a close. The company's accountants recommended the family talk to Ruth Duncan, partner in charge of Atherton Bailey's Maidstone office. The liquidation had to be quick for the shareholders to benefit from entrepreneurs' relief on their distributions which was due to expire within the year.

What we did

Before the company was placed into liquidation, Ruth met with the accountants and family to resolve outstanding issues. It became clear the significant clean-up needed at the remaining oil depot would impact on the liquidation costs and return to shareholders. There would also be a delay in finding a purchaser. To avoid this, Ruth suggested the remaining property be valued and tax efficiently transferred out of the company. This was managed by the accountants and family.

The result

Thanks to Ruth's advice, the liquidation was completed without any unforeseen costs or delays. The shareholders received an immediate return of £884,000 when the company was placed into a
members' voluntary liquidation and £55,000 on its completion eight months later.