As well as the personal matters shareholders face when relocating themselves to a different country, consideration should also be given to the effect on the UK company.
In Australia, from a tax perspective, receipts on liquidation are treated differently than those in the UK. This can cause significantly increased tax liabilities, which could have been avoided if the liquidation occurred prior to the shareholders becoming Australian resident.
If the shareholders wish the UK company to carry on trading, on relocating to Australia it is possible that the company’s residence status would change. Company migration is a complex and costly area, creating filing obligations in both countries. In most circumstances, company migration is not advisable therefore careful structuring should be used to mitigate the risk of this occurring.
In both cases, time is a crucial aspect to ensure any planning is effective. Liquidation of a UK company can take at least three months, and often longer, and ensuring the correct structure is outlined and implemented takes time. Consideration to future plans should therefore be given well in advance of any relocation date.
For more information or advice please contact Joanne Lamberth or Liz Copeland.