ⓘ Planning Estimates Only
All figures are based on verified data from Los Romeros Limited accounts (August 2025) and the Spanish CGT Report (March 2026). They must be confirmed by a CIOT-registered Chartered Tax Adviser and licensed Insolvency Practitioner before any formal action is taken.
The Starting Position
The Lanzarote property held by Los Romeros Limited has been sold for €315,000. The company now holds cash — it owns no assets other than that balance. Philip cannot simply withdraw the money. Every route out of the company carries a different tax cost. The question is: which is the cheapest legal path?
| Item | Amount | Source |
|---|---|---|
| Sale Price | €315,000 | Confirmed |
| Acquisition Cost (2019 Escritura) | €185,000 | Verified deed |
| Total Deductions (acquisition + disposal + repairs) | ∼€221,140 | CGT Report |
| Taxable Gain (Spain) | ∼€93,860 | Calculated |
| Spanish Tax @ 19% IRNR | ∼€17,834 | Calculated |
| — Withheld at Notary (Modelo 211, 3% of sale) | €9,450 | Confirmed |
| — Balance due via Modelo 210 | ∼€8,384 | Calculated |
| Director’s Loan (tax-free recovery) | £25,069 | 2025 Accounts |
| Net EUR proceeds into UK company (est.) | ∼€297,166 (∼£254,000) | Estimated @ 1.17 |
Comparing Every Option
There are four realistic strategies Philip can pursue. Only one is recommended.
| Strategy | Spanish Tax | UK Corp Tax | Extraction Tax | Est. Net to Philip | Recommended? |
|---|---|---|---|---|---|
| A — MVL (Wind Up Company) | ∼€17,834 (FTCR credited) | Minimal ∼£4,800 | CGT @ 18–24% | ∼£188,000–£193,000 | ✓ Yes — Best |
| B — Buy Another Spanish Property (in company) | Same | Deferred then worse | Higher long-run | Less | ✗ No |
| C — Buy UK BTL Property (pre-MVL) | Same | Complicates CT | SDLT surcharge + CGT | Less | ✗ No |
| D — Pay Dividends (no MVL) | Same | Same | Income Tax up to 39.35% | ∼£170,000 | ✗ Worst |
Scenario A — MVL Dissolution (Recommended)
✓ Strongly Recommended
Senior Adviser Verdict
Wind up the company via MVL. Do not buy more property inside it.
The Members’ Voluntary Liquidation (MVL) legally converts the company cash into a capital distribution, taxed at CGT rates (18–24%) rather than Income Tax rates (up to 39.35%). For a retired basic-rate taxpayer, this is the single most efficient extraction method available in UK law.
The Spanish CGT is already fixed — nothing can reduce it now. The only question left is how to get the remaining ∼£254,000 out of Los Romeros Limited as cheaply as possible. The MVL achieves that.
The Tax Waterfall — Step by Step
| Spain — Already Settled | |
| Sale Proceeds | €315,000 |
| Less: Spanish IRNR @ 19% of gain | (€17,834) |
| Net retained by company | €297,166 ≈ £254,000 |
| UK Corporation Tax (CT600 Filing) | |
| Taxable gain (GBP equivalent, €93,860 ÷ 1.17) | ∼£80,222 |
| UK Corp Tax @ 25% | ∼£20,056 |
| Less: Foreign Tax Credit Relief (FTCR — Spanish tax in GBP) | (∼£15,243) |
| UK Corp Tax top-up payable | ∼£4,813 |
| Company Cash Pre-MVL Distribution | |
| Cash in company (GBP) | ∼£254,000 |
| Less: UK Corp Tax top-up | (∼£4,813) |
| Less: MVL IP fees | (∼£3,000–£5,000) |
| Less: CTA / accountant fees | (∼£2,500) |
| Less: Director’s Loan repayment (tax-free to Philip) | (£25,069) |
| Distributable capital pool | ∼£218,000 |
| Philip’s Personal CGT on MVL Distribution | |
| Distribution received | ∼£218,000 |
| Less: Annual CGT exemption (2025/26) | (£3,000) |
| CGT on first ∼£22,700 @ 18% (basic rate) | (∼£4,086) |
| CGT on remaining ∼£192,300 @ 24% (higher rate) | (∼£46,152) |
| Total personal CGT | ∼£50,238 |
| Summary — What Philip Receives | |
| Director’s Loan (tax-free) | £25,069 |
| MVL distribution after CGT (£218,000 − £50,238) | ∼£167,762 |
| Estimated Total Net to Philip | ∼£192,831 |
ⓘ Key AssumptionThe CGT calculation assumes Philip’s retirement income is approximately £15,000/year. If his income is lower, more of the distribution falls in the 18% basic rate band and the net figure improves. Your CTA must confirm this with Philip’s actual income figures.
MVL Timeline
| Phase | Duration | Action |
|---|---|---|
| 1 — Pre-MVL Prep | Weeks 1–4 | Appoint a licensed Insolvency Practitioner (IPA/ICAEW regulated). Director signs Declaration of Solvency (Form LQ01). Pass Special Resolution to wind up. |
| 2 — HMRC Clearance | Weeks 4–16 | File CT600 with Foreign Tax Credit Relief applied. Seek S.1020 HMRC pre-distribution clearance. Settle all outstanding creditors. |
| 3 — Capital Distribution | Weeks 12–20 | IP distributes cash as capital to Philip. Philip files SA108. Pay CGT by 31 January following the tax year. |
| 4 — Dissolution | Weeks 18–26 | IP files final account. Companies House automatically strikes off Los Romeros Limited. |
Scenario B — Buying Another Property Inside the Company
✗ Not Recommended
⚠ Common MisconceptionPhilip is thinking about buying another property to “offset the taxes.” This is a very understandable instinct, but it does not work the way people expect.
| What it DOES | What it Does NOT Do |
|---|---|
| Defers UK Corporation Tax (company doesn’t dissolve yet) | Does NOT reduce the Spanish CGT — that bill is already fixed |
| Keeps funds working in an appreciating asset | Does NOT create Spanish reinvestment relief — Philip is a UK resident selling via a corporate wrapper. Entirely unavailable. |
| Avoids immediate MVL CGT trigger | Does NOT create UK rollover relief — Los Romeros is a passive SPV, not a trading group |
| — | Increases the final tax bill — a larger accumulated pot pushes more into the 24% CGT band at eventual MVL |
| — | Increases ongoing costs — CT600 filings, Modelo 210 annual charges, Companies House compliance |
⚠ Long-Run WarningBuying another property is a deferral strategy that increases long-run total tax, complexity, and risk. If Philip wants to hold property for lifestyle reasons, he should do it personally after the MVL — far simpler and cheaper.
Scenario C — Buying UK Property Before MVL
✗ Not Recommended
| Problem | Detail |
|---|---|
| SDLT Surcharge | A company buying residential property pays standard SDLT plus a 3% surcharge. On a £200,000 property: ∼£8,000 in extra stamp duty alone. |
| Corp Tax on Rental Income | All rental profit taxed at 25% CT inside the company before Philip can access it. |
| Double Tax Events | When the UK property is eventually sold: another round of UK Corp Tax, then a second MVL distribution with personal CGT. |
| Complexity & Cost | Annual accounts, CT600 filings, and property management. Completely avoidable by extracting cash via MVL now. |
The Smart Property Play: Buy Personally After MVL
Considered — if Philip wants property
If Philip wants to invest in property, the right sequence is: complete the MVL first, extract ∼£192,000 net personally, then buy property in his own name. This is dramatically superior to buying inside the company.
| Feature | Inside Corporate Wrapper | Personally (post-MVL) |
|---|---|---|
| SDLT rate | Standard + 3% company surcharge | Standard rates only |
| CGT on eventual sale | 25% Corp Tax THEN MVL CGT | 18/24% CGT directly |
| Annual compliance | CT600, ATED risk, Modelo 210 | Simple Self-Assessment |
| Estate planning | Complex corporate structure | Straightforward gifting & IHT planning |
Three Levers That Still Improve the MVL Outcome
1. Maximise the Director’s Loan Before MVL
The DLA stands at £25,069. Every additional pound added is recovered tax-free at MVL. Philip should document every personal payment made for Los Romeros Limited since 31 August 2025: insurance premiums, utility bills, agent fees, professional fees.
💰 Tax SavingEvery £1,000 added to the DLA saves £180–£240 in personal CGT. It is the highest-value paperwork exercise available before the MVL completes.
2. Split the MVL Across Two Tax Years
If the MVL straddles 5 April, Philip can access the £3,000 CGT annual exemption twice — saving approximately £540–£720 with zero effort. Just ask the IP to plan the first distribution before year-end.
3. Use a Specialist FX Broker
| Route | Spread | Cost on €254,000 |
|---|---|---|
| HSBC / Barclays / Lloyds | ∼3% | ∼£6,500 lost |
| Currencies Direct / TorFX | ∼0.4% | ∼£867 |
| Saving | — | ∼£5,600 |
Estate Planning — After the MVL
Once ∼£192,000 lands in Philip’s personal estate, it must not sit uninstructed as raw cash — it will be subject to 40% Inheritance Tax on death above his nil-rate band.
| Strategy | IHT Saving | Survivorship Condition | Notes |
|---|---|---|---|
| Gifts to children (PETs) | Exempt if survived 7 years | 7 years | Potentially Exempt Transfer. Any amount. No cap. |
| Annual exemption (£3k/yr) | Immediate | None | Use every year. Carries forward 1 year. |
| Gifts from income (s.21 IHTA) | Immediate | None | Must be habitual, from pension income. Document carefully. |
| AIM shares (Business Relief) | 100% exempt after 2 years | 2 years | Riskier. Confirm suitability with IFA. |
⚠ IHT RiskIf Philip’s estate (Sheffield home + MVL proceeds + savings) exceeds £500,000, a STEP-registered solicitor should review his Will and gifting strategy promptly after the MVL distribution lands.
Priority Action Plan
- NOWFile the Modelo 210 — Pay Spanish BalanceApproximately €8,384 is due to AEAT within 3 months of sale completion. File via an independent Spanish asesor fiscal. Do not use Wincham’s Calpe office. Deadline: approximately 20 July 2026.
- NOWOpen a Currencies Direct or TorFX AccountDo NOT convert euros at a high-street bank. Open the FX account now so it is ready when the IP initiates the distribution. Estimated saving: ∼£5,600.
- 30 DAYSInstruct a UK Chartered Tax Adviser (CTA)Engage a CIOT-registered CTA to prepare the final CT600 with Foreign Tax Credit Relief (FTCR) applied — this nearly eliminates the UK Corp Tax bill by crediting the Spanish tax already paid.
- 30 DAYSAppoint a Licensed Insolvency Practitioner (IP)The IP must be regulated by the IPA or ICAEW. Find one via the R3 register. Do not use anyone recommended by Wincham or Adrem.
- PRE-MVLDocument All Director’s Loan AdditionsProvide your accountant a complete list (with bank statements) of every personal payment made for Los Romeros since 31 August 2025. Every pound added is recovered tax-free.
- PRE-MVLPlan Tax Year Timing of MVL DistributionAsk the IP to straddle the distribution across two tax years to access the CGT exemption twice. Saves ∼£600–£700 with zero effort.
- POST-MVLReview Estate Plan with a STEP SolicitorOnce ∼£192,000 lands personally, review the Will, gifting strategy, and IHT exposure immediately. Do not leave this uninstructed.
The Bottom Line
Net Proceeds Summary — MVL Route
| Sale Proceeds | €315,000 |
| Spanish Tax (IRNR @ 19% of gain) | (€17,834) |
| UK Corp Tax top-up (after FTCR) | (∼£4,813) |
| MVL professional fees (IP + CTA) | (∼£7,500) |
| Personal CGT on MVL distribution | (∼£50,238) |
| Director’s Loan (returned tax-free) | +£25,069 |
| Estimated Net to Philip | ∼£188,000 – £193,000 |
Final Recommendation
Do not buy more property inside the company.
Wind up Los Romeros Limited via MVL. Recover the Director’s Loan tax-free. Pay CGT at 18–24% on the remaining distribution. Then — if Philip wants property — buy it personally from his net proceeds.
This is the cleanest, cheapest, and most straightforward path to getting ∼£192,000 into Philip’s hands with full legal compliance.
⚠ Professional Advice RequiredThis document is an AI-generated planning analysis. All figures are estimates. Formal advice from a CIOT-registered CTA, licensed Insolvency Practitioner, and STEP-registered solicitor is required before any action is taken.