Posted by alisoncollier - June 22, 2026 3:09 pm Is a Members’ Voluntary Liquidation (MVL) still tax-efficient?

Many company directors are asking whether a Members’ Voluntary Liquidation (MVL) is still worthwhile following recent changes to Business Asset Disposal Relief.
In most cases, the answer is yes.
While the tax advantages are not quite as generous as they once were, an MVL can still offer a more tax-efficient outcome than extracting funds from a company as income. It also provides a structured and orderly way to bring a solvent company to a close.
What is a Members’ Voluntary Liquidation (MVL)?
A Members’ Voluntary Liquidation is a formal process used to close down a solvent company. It is typically used where a company has come to the end of its useful life and the directors and shareholders wish to close it in an organised way.
Why do directors use an MVL?
An MVL is commonly used where shareholders wish to:
• Extract retained profits in a tax-efficient way
• Close a company that is no longer needed
• Retire or step away from a business
• Simplify a group structure
When might an MVL still be appropriate?
An MVL may still be worth considering where:
• The company has substantial retained profits
• The business has fulfilled its purpose and is no longer required
• The director is retiring
• Shareholders wish to extract funds and close the company in an orderly manner
• A group structure is being simplified
Every situation is different, but in many cases the tax difference remains significant enough to make an MVL worth considering.
Final thoughts
While tax rules have changed, MVLs remain a widely used and effective way to close solvent companies.
The key question is not whether MVLs still work, but whether they are the most appropriate option for your individual circumstances.
Taking advice at an early stage can help ensure the most suitable and tax-efficient route is chosen.