Tax Planning Season: Is It Time to Consider an MVL for Your Clients?
As we approach tax planning season, most conversations naturally focus on optimising current year outcomes - managing taxable income, timing deductions, and structuring distributions.
But there’s another opportunity that is often overlooked.
For many clients, particularly those with legacy or redundant entities, now is the ideal time to step back and ask a broader question:
Is the current corporate structure still fit for purpose or is it time to simplify?
The Opportunity: Cleaning Up Corporate Structures
It’s not uncommon to see clients with:
Dormant or underutilised companies
Accumulated retained earnings sitting in old entities
Historic structures that no longer align with current operations
Businesses that have been sold or wound down, but entities remain
Left unchecked, these structures can create:
Ongoing compliance costs
Unnecessary complexity
Tax inefficiencies over time
Risk exposure (including director obligations and ATO scrutiny)
This is where a Members’ Voluntary Liquidation (MVL) becomes a highly effective planning tool.
What is an MVL and Why It Matters in Tax Planning
An MVL is a formal, solvent liquidation process that allows a company to be wound up in a tax-efficient and compliant manner.
Critically, where structured correctly, an MVL can:
Facilitate capital distributions rather than income distributions
Enable access to CGT concessions (where applicable)
Extract retained profits in a more tax-effective way
Finalise the company’s affairs cleanly and definitively
For accountants, this creates a strategic lever, not just a compliance process.
When Should You Be Thinking About an MVL?
Tax planning time is the ideal trigger point.
You should be considering an MVL where clients:
Have substantial retained earnings in a company
Have ceased trading or sold a business
Are restructuring or simplifying group structures
Are looking to retire or exit
No longer require a company but have surplus cash or assets
Handled proactively, an MVL can be integrated into broader tax strategy rather than being a reactive clean-up exercise later.
The Risk of Getting It Wrong
While the benefits are clear, MVLs sit at the intersection of tax law and insolvency law and require careful execution.
Common pitfalls include:
Failing to properly assess solvency and eligibility
Incorrect treatment of distributions (capital vs income)
Overlooking Division 7A, loans, or intercompany balances
Poor documentation or timing issues
Lack of coordination between accountant and liquidator
This is not a process to “dabble” in and it requires a structured, compliant approach.
Working with the Right Partner
We work closely with accountants to support clients through the MVL process in a way that is:
Compliant – aligned with both Corporations Act and tax clearance obligations (note we don’t provide tax advice just facility the MVL compliance process)
Efficient – clear process, minimal disruption to the client
Transparent – regular communication at every stage
Collaborative – working alongside you as the trusted adviser
We understand that your client relationship is paramount. Our role is to complement your advice — not complicate it.
A Practical, Collaborative Approach
Our process is designed to integrate seamlessly into your tax planning workflow:
Initial discussion – workshop the client’s structure and objectives
Pre-appointment review – identify any risks or issues early
Clear strategy – align on tax and commercial outcomes
Execution – manage the MVL process end-to-end
Ongoing communication – keep you and your client informed throughout
The result: a clean, compliant outcome that supports your broader tax strategy
Start the Conversation Early
Like most effective tax strategies, timing matters.
The earlier an MVL is considered, the more flexibility there is to:
Structure outcomes appropriately
Address any legacy issues
Align with year-end tax planning decisions
Let’s Workshop Your Client’s Situation
If you have a client where an MVL might be worth exploring or even if you’re unsure, we’re always happy to have a discussion.
We can help you:
Assess whether an MVL is appropriate
Identify risks or opportunities
Work through the best path forward
Reach out to workshop your client’s situation. We’re here to support you and deliver a practical, well-executed outcome.