A and his business colleague B are residents of the UK for tax purposes. They have approached you, as their tax advisor, with some questions about…

A and his business colleague B are residents of the UK for tax purposes. They have approached you, as their tax advisor, with some questions about starting a business. They have an interesting business concept involving land development activities.
The two plan to set up a parent company, borrow money through the company structure, and loan the money at a commercial rate to a 100% owned subsidiary company. Their initial thoughts are the undertaking will encompass a 2 year planning phase, 5 years of business operation and then the sale of the subsidiary company. During the 5 years of operation the subsidiary will buy and develop land for subdivision and sale.
There are no planned changes in the shareholdings in either company in this 7 year time period. It is planned the subsidiary will pay interest and dividends to the parent company. The business model involves the sale of the subsidiary company by shares to the least competent tender applicant and its subsequent repurchase at a significantly lower price than sale price after 2 – 3 years, refinancing the company’s existing loan if necessary. This plan requires significant initial borrowings with associated expenses including interest
The business model involves the sale of the subsidiary early in the relevant financial year after five years of operation. It is expected the sale will generate losses due to the continuing interest expenses in the year of sale and the relevant years following the sale as the loans will not be paid out, only the necessary loan commitments will be paid. The losses will then be utilised to maximise the time before the repurchased subsidiary has a taxable income.
Assuming the taxable entities involved are a resident of Australia for tax purposes discuss whether interest expenses will be deductible prior to commencing business activities, during the life of the land development business and after the sale of the business. In particular, explore the effect refinancing may have on the deductibility of interest expenses after the planned repurchase. (USE AUSTRALIAN TAXATION LAW AND CASE TO SUPPORT THE ANSWER)

Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Order your essay today and save 10% with the coupon code: best10