Selling Ltd. Company (with cash in hand) - Tax?

[Lambs]

J,

Cash surpluses derived solely or mainly from undistributed reserves should not prejudice entitlement to Entrepreneurs' Relief. There is perhaps the (extremely unlikely) possibilities that you spend more time managing your cash reserves than you do conducting your trade, or that your income from cash deposits is significant when compared to your trading income, but aside from that, I really don't think it's an issue.

However, if your 'surplus' had come about by way of, say, borrowing money to acquire property for investment purposes, (and I don't just mean bricks and mortar), then that might be a different matter. (Or not even a surplus as such).

Would you want to pay yourselves a dividend prior to sale? Would that be the most tax-efficient route, when there's an effective 10% rate applicable? Depends on your other income/gains. If in doubt, then (as always) I recommend that you speak to a suitably qualified professional. Given that the sale of the business appears imminent, and for a significant amount, I'd rather hope you already have one advising you on the sale!

Regards,

Lambs