Case Study: Project House

The directors and shareholders of Project House ran a successful IT related business for many years, during which time they were supported by tax and accounting colleagues at Armstrong Watson.  Following an approach from a competitor, and with help from Armstrong Watson’s corporate finance specialists, a sale of the business and assets of the company was agreed and completed.  The aim thereafter was to return value to Project House’s shareholders.

Initially, tax and insolvency specialists advised on technical and commercial aspects of winding down the company to ensure that as many outstanding issues were resolved as possible.  The company was then placed into Members’ Voluntary Liquidation (a solvent liquidation).  This enabled shareholders to receive distributions as capital returns, enabling claims for Entrepreneurs Relief and resulting in a very favourable rate of tax on all returns to shareholders.  Tax and insolvency specialists worked together to submit final tax returns and obtain tax clearances, resulting in further recoveries for Project House and certainty in respect of the final tax position.

In parallel shareholders had entered into some deferred payment terms and warranties under the Business and Assets Sale Agreement.  The insolvency specialists ensured that all deferred consideration was recovered, a proposed warranty claim was defended without loss and, ultimately, that all matters relating to the Sale Agreement were satisfactorily completed.  In addition the liquidators also transferred the company’s former trading premises to the shareholders, so that they could hold it as an investment property in their own names.

Following completion of all matters in the liquidation, final returns to shareholders have been made.  The shareholders are now advised by Armstrong Watson’s financial planning specialists so that their money continues to work for them, with assistance from our tax specialists in managing their liabilities to HMRC.

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