What was the situation? 

Our client who operated a greeting card business until the late 1990s advised us that this entity had outlived its useful purpose and as such was considering winding up the company.

Our client informed us that the relevant company had paid out all its liabilities and that the available assets on its balance sheet comprised a substantial related party loan which was predominately represented by pre-CGT capital reserves.

What was our strategy?

Following our review of the client’s balance sheet, were were appointed Liquidators via a members’ voluntary liquidation (solvent liquidation) to take advantage of the Liquidators’ distribution of pre-CGT capital reserves to minimise tax.

After our appointment, we:

– Confirmed that all the company’s liabilities had been paid.

– Received a statutory clearance from the Australian Taxation Office.

– Issued a Liquidator’s distribution statement to unlock pre-CGT reserves to minimise tax.

– Lodged the necessary paperwork with ASIC to deregister the company.

As always, Charles & Co acted swiftly to allow our client to save time and money by completing this project within three (3) months of our engagement.

What was the outcome?

A solvent liquidation strategy was the most tax-effective way to wind down our client’s company with pre-CGT capital reserves given the advantages that a Liquidator’s distribution statement provides.

Claudio Trimboli, Liquidator, commented:

“A solvent liquidation strategy is a cool way to potentially minimise tax for shareholders who own companies with pre-CGT capital reserves, small business CGT exemptions and reserves consisting of Government support grants such as cash flow boost.”

How can Charles & Co. help you?

Our Team with more than 50 years combined experience is well placed to help businesses unlock capital, enhance efficiency, and reduce administrative and financial costs. We encourage anyone considering winding down, closing and eliminating companies to contact us to discuss your options.