请输入或粘贴题目内容
搜题
拍照、语音搜题，请扫码下载APP
题目内容
（请给出正确答案）
此题为判断题(对，错)。
答案
更多“In tax free reorganization, sellers can borrow against the stock if they need cash.在”相关的问题
第1题
(b) (i) Advise Benny of the income tax implications of the grant and exercise of the share options in Summer
Glow plc on the assumption that the share price on 1 September 2007 and on the day he exercises the
options is ￡3·35 per share. Explain why the share option scheme is not free from risk by reference to
the rules of the scheme and the circumstances surrounding the company. (4 marks)
第2题
A.Buyermustcontinueseller’shistoricbusiness买方必须持续经营卖方的业务
B.Sellermustpaycapgains/regularincometax卖方必须支付资本收益/常规所得税
C.Shareholderofsellercandeferpayingtaxesonbuyershareconsideration卖方股东对于买方股票对价部分可以递延支付税款
D.Sellertaxesonbuyersharesarepayablewhenthesharesaresold卖方在出售买方股票时需支付税款
第3题
Section A – BOTH questions are compulsory and MUST be attempted
Tramont Co is a listed company based in the USA and manufactures electronic devices. One of its devices, the X-IT, is produced exclusively for the American market. Tramont Co is considering ceasing the production of the X-IT gradually over a period of four years because it needs the manufacturing facilities used to make the X-IT for other products.
The government of Gamala, a country based in south-east Asia, is keen to develop its manufacturing industry and has offered Tramont Co first rights to produce the X-IT in Gamala and sell it to the USA market for a period of four years. At the end of the four-year period, the full production rights will be sold to a government-backed company for Gamalan Rupiahs (GR) 450 million after tax (this amount is not subject to inflationary increases). Tramont Co has to decide whether to continue production of the X-IT in the USA for the next four years or to move the production to Gamala immediately.
Currently each X-IT unit sold makes a unit contribution of $20. This unit contribution is not expected to be subject to any inflationary increase in the next four years. Next year’s production and sales estimated at 40,000 units will fall by 20% each year for the following three years. It is anticipated that after four years the production of the X-IT will stop. It is expected that the financial impact of the gradual closure over the four years will be cost neutral (the revenue from sale of assets will equal the closure costs). If production is stopped immediately, the excess assets would be sold for $2·3 million and the costs of closure, including redundancy costs of excess labour, would be $1·7 million.
The following information relates to the production of the X-IT moving to Gamala. The Gamalan project will require an initial investment of GR 230 million, to pay for the cost of land and buildings (GR 150 million) and machinery (GR 80 million). The cost of machinery is tax allowable and will be depreciated on a straight-line basis over the next four years, at the end of which it will have a negligible value.
Tramont Co will also need GR 40 million for working capital immediately. It is expected that the working capital requirement will increase in line with the annual inflation rate in Gamala. When the project is sold, the working capital will not form. part of the sale price and will be released back to Tramont Co.
Production and sales of the device are expected to be 12,000 units in the first year, rising to 22,000 units, 47,000 units and 60,000 units in the next three years respectively.
The following revenues and costs apply to the first year of operation: – Each unit will be sold for $70;
– The variable cost per unit comprising of locally sourced materials and labour will be GR 1,350, and;
– In addition to the variable cost above, each unit will require a component bought from Tramont Co for $7, on which Tramont Co makes $4 contribution per unit;
– Total fixed costs for the first year will be GR 30 million.
The costs are expected to increase by their countries’ respective rates of inflation, but the selling price will remain fixed at $70 per unit for the four-year period.
The annual corporation tax rate in Gamala is 20% and Tramont Co currently pays corporation tax at a rate of 30% per year. Both countries’ corporation taxes are payable in the year that the tax liability arises. A bi-lateral tax treaty exists between the USA and Gamala, which permits offset of overseas tax against any USA tax liability on overseas earnings. The USA and Gamalan tax authorities allow losses to be carried forward and written off against future profits for taxation purposes.
Tramont Co has decided to finance the project by borrowing the funds required in Gamala. The commercial borrowing rate is 13% but the Gamalan government has offered Tramont Co a 6% subsidised loan for the entire amount of the initial funds required. The Gamalan government has agreed that it will not ask for the loan to be repaid as long as Tramont Co fulfils its contract to undertake the project for the four years. Tramont Co can borrow dollar funds at an interest rate of 5%.
Tramont Co’s financing consists of 25 million shares currently trading at $2·40 each and $40 million 7% bonds trading at $1,428 per $1,000. Tramont Co’s quoted beta is 1·17. The current risk free rate of return is estimated at 3% and the market risk premium is 6%. Due to the nature of the project, it is estimated that the beta applicable to the project if it is all-equity financed will be 0·4 more than the current all-equity financed beta of Tramont Co. If the Gamalan project is undertaken, the cost of capital applicable to the cash flows in the USA is expected to be 7%.
The spot exchange rate between the dollar and the Gamalan Rupiah is GR 55 per $1. The annual inflation rates are currently 3% in the USA and 9% in Gamala. It can be assumed that these inflation rates will not change for the foreseeable future. All net cash flows arising from the project will be remitted back to Tramont Co at the end of each year.
There are two main political parties in Gamala: the Gamala Liberal (GL) Party and the Gamala Republican (GR) Party. Gamala is currently governed by the GL Party but general elections are due to be held soon. If the GR Party wins the election, it promises to increase taxes of international companies operating in Gamala and review any commercial benefits given to these businesses by the previous government.
Required:
Prepare a report for the Board of Directors of Tramont Co that
(i) Evaluates whether or not Tramont Co should undertake the project to produce the X-IT in Gamala and cease its production in the USA immediately. In the evaluation, include all relevant calculations in the form. of a financial assessment and explain any assumptions made;
Note: it is suggested that the financial assessment should be based on present value of the operating cash flows from the Gamalan project, discounted by an appropriate all-equity rate, and adjusted by the present value of all other relevant cash flows. (27 marks)
(ii) Discusses the potential change in government and other business factors that Tramont Co should consider before making a final decision. (8 marks)
Professional marks will be awarded in question 1 for the format, structure and presentation of the answer. (4 marks)
第4题
A.Individuals with tax payable of less than ￡1,000 for a tax year are not required to file a tax return
B.Individuals are only required to file a tax return for a tax year if they receive a notice to deliver from HM Revenue and Customs (HMRC)
C.All individuals who submit a tax return on time are able to have their tax payable calculated by HM Revenue and Customs (HMRC)
D.The tax return for an individual covers income tax, class 1, class 2 and class 4 national insurance contributions and capital gains tax liabilities
第5题
(ii) The recoverability of the deferred tax asset. (4 marks)
第6题
听力原文：The tax return does not show accrued income.
(8)
A．The tax return is not shown in the income.
B．The income is not accurate in taxation.
C．The tax should be returned according to the income.
D．The tax return is not in accordance with the income that should be taxed.
第7题
A.Enterprise income tax (EIT)
B.Individual income tax (IIT)
C.Land appreciation tax (LAT)
D.Business tax (BT)
第8题
(c) Explain the capital gains tax (CGT) and income tax (IT) issues Paul and Sharon should consider in deciding
which form. of trust to set up for Gisella and Gavin. You are not required to consider inheritance tax (IHT) or
stamp duty land tax (SDLT) issues. (10 marks)
You should assume that the tax rates and allowances for the tax year 2005/06 apply throughout this question.
第9题
Which of the following statements is/are true？
(1) Corporation tax is a direct tax on the turnover of companies
(2) National insurance is a direct tax suffered by employees, employers and the self-employed on earnings
(3) Inheritance tax is a direct tax on transfers of income by individuals
(4) Value added tax is a direct tax on the supply of goods and services by businesses
A.1 and 3 only
B.2 only
C.1, 2, 3 and 4
D.1, 2 and 4 only
第10题
Individuals and businesses compute their ______ based on their recorded earnings.
A．deferred tax
B．sales tax
C．income tax
D．corporation tax
第11题
(ii) State, giving reasons, the tax reliefs in relation to inheritance tax (IHT) and capital gains tax (CGT) which
would be available to Alasdair if he acquires the warehouse and leases it to Gallus & Co, rather than to
an unconnected tenant. (4 marks)
