5 Mins
Written by: Shona Campbell
Partner & Head of Business Recovery and Insolvency
Last reviewed: 10 September 2026The shareholders of a long-established family company wanted to bring the business to a close through a Members’ Voluntary Liquidation (MVL) while benefiting from the Capital Gains Tax (CGT) reliefs available at the time.
A significant obstacle remained: the company’s principal asset, a commercial property, had not yet been sold. Waiting for the sale to complete could have delayed distributions and potentially exposed shareholders to future tax changes.
By carefully structuring the liquidation and distribution strategy, it was possible to commence the MVL, make an initial capital distribution shortly after appointment, and continue marketing the property. Once the property sale completed, further interim and final distributions were made, allowing shareholders to achieve both their tax planning objectives and full value from the eventual sale.
The Challenge
The shareholders had reached a point where they wished to wind up their family company and return value to shareholders through a solvent liquidation process.
Like many owner-managed and family-owned businesses, a large proportion of the company’s value was tied up in a commercial property. Although the property had been placed on the market, a sale had not yet been secured.
This created a challenging situation. The shareholders wanted to take advantage of the Capital Gains Tax treatment available through an MVL, but they were also conscious that delaying the liquidation until the property sold could introduce uncertainty. Tax legislation can change over time, and postponing action could potentially affect the tax position they hoped to secure.
At the same time, proceeding with a liquidation required careful planning. The shareholders needed a solution that would allow them to:
- Begin the liquidation process without waiting indefinitely for a property sale.
- Access capital in a timely manner.
- Preserve eligibility for the desired Capital Gains Tax treatment.
- Ensure the property continued to be marketed and sold for its full value.
- Maintain compliance with the legal and procedural requirements of a Members’ Voluntary Liquidation.
Achieving these objectives required specialist insolvency and liquidation expertise to balance tax considerations, asset realisation strategy, and shareholder expectations.
Our Approach
The key objective was to create a liquidation strategy that would allow the shareholders to move forward with the MVL while avoiding unnecessary delays caused by the unsold property.
Working closely with the shareholders and their professional advisers, our team assessed the company’s asset position and planned a distribution strategy that reflected both the immediate and longer-term requirements of the liquidation.
A carefully considered approach was implemented that enabled:
- The Members’ Voluntary Liquidation to commence despite the property remaining unsold.
- An initial capital distribution to be made shortly after the liquidators were appointed.
- Ongoing management of the remaining property asset while marketing and sale activities continued.
- Coordination with advisers to ensure the liquidation structure aligned with the shareholders’ objectives.
- Future distributions to be planned and executed as funds became available following the property’s eventual sale.
This approach was important because it removed the need for shareholders to delay the liquidation process solely due to a single unrealised asset. By separating the timing of the MVL from the completion of the property sale, the shareholders were able to progress their plans while maintaining flexibility throughout the liquidation.
The Outcome
Following the appointment of the liquidators, the commercial property remained on the market and the sale process continued.
The property was subsequently sold successfully, allowing additional funds to be released and distributed to shareholders through further interim and final distributions as the liquidation progressed.
Most importantly, the shareholders were able to put the MVL in place when required rather than waiting for an uncertain property sale timetable.
As a result, they achieved their key tax planning objective while still realising full value from the company’s principal asset.
Outcomes Achieved
- Shareholders secured the desired Capital Gains Tax treatment available at the time of liquidation.
- An initial capital distribution was made shortly after the MVL appointment.
- The commercial property continued to be marketed and sold during the liquidation process.
- Further interim and final distributions were made after the property sale completed.
- Full value was achieved from the eventual sale of the company’s principal asset.
- The liquidation progressed in a structured and compliant manner with appropriate adviser involvement.
Key Results
- Members’ Voluntary Liquidation commenced before the property sale completed
- Initial capital distribution made shortly after liquidator appointment
- Desired Capital Gains Tax treatment secured
- Commercial property successfully sold during the liquidation
- Remaining funds distributed through interim and final payments
Why This Matters
Many solvent companies that are candidates for a Members’ Voluntary Liquidation hold assets that cannot be converted into cash immediately. Commercial properties, investment assets, or other significant holdings can often delay decision-making as shareholders wait for the “right time” to proceed.
This case demonstrates that an unsold asset does not necessarily prevent a company from entering an MVL or achieving shareholders’ wider objectives.
With our specialist advice it was possible to begin the liquidation process, access capital sooner, and preserve important tax outcomes while asset realisations continue in the background.
For shareholders considering a company closure where timing, tax efficiency, and asset disposal are all key factors, early planning can provide significantly greater flexibility and certainty.
Frequently Asked Questions
Yes. In some circumstances, a Members’ Voluntary Liquidation can begin before a property sale completes. Careful planning is required to ensure the liquidation can proceed appropriately while the property remains available for sale and future distributions are managed correctly.
Potentially, yes. Depending on the circumstances of the company and its assets, an initial capital distribution may be possible before all assets have been realised, with further distributions made as additional funds become available.
Timing can be important where shareholders are seeking to benefit from specific tax treatment or reliefs available at the time. Delaying a liquidation while waiting for assets to be sold may create uncertainty if tax rules change in the future.
If a company property is sold during the liquidation process, the proceeds can typically be incorporated into the liquidation and distributed through subsequent interim or final distributions, subject to the circumstances of the case.
Property assets can introduce additional complexity into a liquidation because their sale timeline is not always predictable. Specialist advice helps ensure the liquidation, distribution strategy, and asset realisation process are coordinated effectively and remain compliant with relevant requirements.
