A contribution from Anthony Glennon, Partner at Friel Stafford, to the ifac Family Business Report 2026
When owners start thinking about exiting their business, the same three options usually come up. Pass the business to the next generation, sell it to a third party, or bring things to an orderly close through a Members’ Voluntary Liquidation (MVL).
The MVL doesn’t get the same attention as a sale, but in the right circumstances it can be a very sensible and tax-efficient way to extract value from a lifetime’s work.
A Members’ Voluntary Liquidation is a controlled wind-down of a solvent company. The business has finished trading, debts are settled, and what remains is distributed to the shareholders. The principle is simple but the difference between doing it casually and doing it properly can be significant, particularly from a tax point of view.
Tax advantages
A well-structured MVL can allow shareholders to access capital gains tax treatment rather than income tax on the final extraction of value. That alone can make a meaningful difference. Where conditions are met, Entrepreneur Relief may apply, reducing the CGT rate on qualifying gains to 10%.
For many owner managers approaching retirement, Retirement Relief can potentially shelter some or all of the gain from tax altogether at 0%, depending on age, ownership period, and the nature of the assets.
‘In Specie’ distribution
Planning also opens the door to practical advantages. Assets can sometimes be distributed ‘in specie’ i.e. transferred out of the company rather than sold, which can be useful where shareholders wish to retain property or investments personally. And in certain cases, the transfer of unencumbered property or assets out of a company as part of an MVL can occur without stamp duty.
As with any exit route, preparation matters. Liabilities must be cleared, tax affairs brought fully up to date, and the balance sheet carefully reviewed. Loose ends that might have been manageable during trading can become costly if left unresolved during a wind-down. Early planning allows time to simplify the structure, address historic issues, and ensure reliefs are actually available rather than assumed.
“There is a certain peace of mind in closing the doors on your own terms, knowing the affairs of the company are tidy and the value has been extracted efficiently.”
Orderly conclusion
It’s also worth stepping back and viewing the MVL alongside the other two exit paths. Family succession requires a willing and capable next generation, and careful thought around fairness, control, and leadership. A trade sale may deliver the highest headline price, but it involves market timing, buyer negotiations, and the emotional shift of handing over what you built.
An MVL is different. It suits owners who are ready to stop, who may not have a successor, and who prefer a clean, orderly conclusion.
Protecting value
As always, the key is not to drift into a decision. The business is often one of the largest assets a family owns. Whether the path is succession, sale, or MVL, the worst outcome is arriving at that decision unprepared. Good planning keeps the options open – and when it comes to an MVL, it can make the final chapter not just simpler but significantly more rewarding.
If this article raises questions for you and your business, please reach out to our Team at Friel Stafford for advice and assistance.