Deletion of a British limited company after Brexit

The deletion of a limited company from the British commercial register leads to final taxation with the disclosure of hidden reserves.

Before the introduction of the UG, the British legal form of the "Limited" was also popular with start-ups in Germany. However, Brexit has not made life any easier for limited companies that still exist in Germany. Although the Limited remains a company subject to corporation tax, the limitation of liability has ceased to apply since 2021 as a result of Brexit, as the Limited is now considered a partnership or sole proprietorship under civil law. The Federal Ministry of Finance has now explained the tax consequences of deleting the Limited from the UK commercial register. According to this, the deletion leads to a final taxation of the Limited with disclosure of the hidden reserves and to a distribution of the equity capital available after the disclosure of the hidden reserves. In terms of VAT, however, the deletion initially has no effect.