Two ways to take the cash out
MVL vs dividend: which leaves you more in 2026/27
Updated
The difference is the rate: a capital gain under BADR at 18%, or a dividend at up to 39.35%.
Talk to a specialist What is left in the company, your share and your other income. The rates come from GOV.UK.
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How this calculator works
- The BADR rate. GOV.UK: Business Asset Disposal Relief means you pay 18% on all gains on qualifying assets disposed of from 6 April 2026 (14% between 6 April 2025 and 5 April 2026). You can claim a total of £1 million over your lifetime; the calculator taxes any gain above what is left of that £1 million at the main rates. (GOV.UK: Business Asset Disposal Relief, how to claim (the £1 million lifetime total))
- The main CGT rates. GOV.UK lists 18% and 24% for individuals from 6 April 2026, and an annual exempt amount of £3,000 for 2026 to 2027. Following GOV.UK's order, BADR gains use the basic rate band first and the exempt amount is set against the gains that would pay the highest rate. (GOV.UK: Business Asset Disposal Relief, work out your tax)
- The bands. GOV.UK's Income Tax table for 2026 to 2027: a Personal Allowance of £12,570 that goes down by £1 for every £2 of income above £100,000, a basic rate band of £37,700 and the additional rate above £125,140. Scottish and Welsh Income Tax bands are not applied; CGT and dividend tax use the UK bands everywhere. (GOV.UK: Income Tax rates and allowances, current and past)
- The dividend comparison. GOV.UK: a dividend allowance of £500, then 10.75% basic rate, 35.75% higher rate and 39.35% additional rate. The comparison counts the tax on the dividend only. When a dividend takes your income past £100,000 the extra Income Tax on your other income from the lost Personal Allowance is not added, so above that level the dividend route costs more than shown. (GOV.UK: how dividends are taxed)
- Section 396B. A distribution in a winding up is taxed as income if conditions A to D are all met: a 5% interest, a close company, carrying on a similar activity within two years, and a main purpose of reducing Income Tax. The calculator flags condition C from your answer and tests none of the others. (ITTOIA 2005 section 396B: distributions in a winding up)
- Solvency. An MVL needs the directors' statutory declaration that the company will pay its debts in full, with interest, within a period of no more than 12 months. The calculator assumes the company is solvent and its debts are already paid out of the cash you enter. (Insolvency Act 1986 section 89: declaration of solvency)
- What is not worked out. One distribution in one tax year, cash only: no distribution in specie, no staged distributions across tax years, no losses, no other gains in the year, no Investors' Relief and no tax for a non-resident shareholder. It is a figure to frame a conversation, not tax advice.
The two rates
GOV.UK charges Business Asset Disposal Relief at 18% on qualifying gains disposed of from 6 April 2026. A dividend pays nothing on the first £500, then 10.75% in the basic rate band, 35.75% in the higher rate band and 39.35% in the additional rate band.
Source: MVL tax rules for 2026/27, from GOV.UK and legislation.gov.uk: every row, with its source
Where the MVL loses
- The liquidator's fee: four UK firms publish entry fees from £1,245 to £4,000, plus VAT.
- A small sum: with little left in the company, the fee can outweigh the tax saved.
- Section 396B: carrying on a similar activity within two years can turn the distribution back into income.
Source: MVL fees UK insolvency practitioners publish: every firm, with its own page
Run your own figures
The MVL calculator sets both routes side by side on what is left in your company, your share and your other income.