Voluntary liquidations likely to spike post-passage of CGT reforms, partner says

“Many of these structures haven’t been reviewed for years. The proposed tax changes are prompting advisers and their clients to ask whether those entities still serve the purpose they were originally established for.”

Moore predicts an impact on family investment companies, passive investment entities, and legacy corporate structures established for succession planning, asset protection, and tax efficiency, with the new question being whether the changed tax structure makes the business worth the increased complexity and administrative costs.

“What starts as a tax discussion quickly becomes a conversation about how wealth will be managed and transferred to the next generation.”

In this vein, business owners and advisers are encouraged to review options proactively, given the greater flexibility and more options available.

Moore noted: “For many clients, the question is no longer whether they should review their structure; it’s what action they should take once that review is complete.”

“If the reforms proceed, I expect activity to further accelerate as July 2027 approaches. That activity is likely to include restructures, valuations, succession planning reviews and, increasingly MVLs.”

Moore identified five questions accountants should consider regarding potential MVLs, including whether the company still serves a genuine, commercial purpose; whether it holds pre-20 September 1985 assets or significant unrealised capital gains; whether the structure is likely to operate as intended under the reforms; whether there is any retained profits, surplus assets or accumulated wealth trapped within the company, and whether an MVL would help achieve the client’s succession or wealth transfer.

“The goal isn’t to rush into decisions based solely on proposed tax changes,” Moore said.

“It’s about understanding the options available and ensuring clients are positioned to make informed decisions as the legislative picture becomes clearer.”