Distribution of company assets
Companies that have ceased to trade and are solvent can be wound up by way of an MVL. When all creditors are paid the liquidator can distribute the remaining assets of the company to its shareholders. The gain on the shareholders funds is generally taxed at the Capital Gains Tax rate as opposed to the higher income tax rate for pre-liquidation dividends. An MVL can therefore be a tax efficient way for shareholders to extract funds from a company on cessation of trade.