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Thank you so so much for the clairty, I can always rely on the amazing people here when I’m not sure of something. Really appreciate your quick reply!
Okay… I guess I was looking for more definitive statements indicating that the covenant has already breached and thus the implications of this, but I guess stating this might also give me marks.
Thank you so very much, for this answer and for all other answers in the forum that have cleared so many of my doubts.Really sorry to jump in on this but I just solved this question and had a similar doubt, the free cash flow that they have used as Do 355.9 which is before incorporating investment income but the free cash flow after deducting investment is 337.3.
The question states that :
“After four years, the annual growth rate of free cash flows is expected to be 5% for the foreseeable future. It is assumed that there will be no additional capital investment from year 5 onwards.”
So I think the doubt is whether the 5% increase is on the cash flow after accounting for investment or before.So for this question could I have taken the % on current mv of Fraser as the increase in val for SH of Fraser? Because in the answers they have retrospectively assessed that the premium calculated is more than 35%.
A quick follow up:
This might be silly but does the mv of the combined company vary from the calculated val only during a cash offer? When there is a share for share offer regardless of the premium required will the total eq mv val of the new company be equal to what was computed from cash flows ?Oof okay, that’s a relief. Thank you so much for your quick insight on this and the hundred other questions you’ve answered over the years. You’re a lifesaver!
Could you please explain what you mean by “this is not the case because tax is charged in the foreign country” as there still is a tax saving due to them not having to pay the tax ?
I have watched all the lectures and honestly, thank you so much for them. Your explanations are the only reason I can understand the Study text.
I’m so sorry to bring this back from the dead but I had a doubt with this question and the question posted contains all the details I would need to mention.
After reading the question and especially the part about the property being the only asset of the SPE my immediate thoughts were – it’s not a business as the val is concentrated on one asset and hence the treatment in the question is right.
Could you please tell me why I’m wrong and the SPE must be consolidated?
Okay. If nothing is mentioned in the question, would it suffice if I state both of these possibilities and explain the treatment ?
here is the question from bpp:
Ronald is self-employed. He purchased a house and lived in it for two years. The house was then unoccupied for five years because Ronald went to work outside the UK. He then lived in the house for three years. Ronald then went to live with his mother and the house was unoccupied for six and a half years. Finally, Ronald lived in the house for the last six months of his ownership.How many months of Ronald’s 17-year period of ownership of the house will be exempt for the purposes of private residence relief?
answer:
an excerpt from the answer relating to 5 years overseas is “Deemed occupation – up to 4 years self- employed overseas, plus 1 year any reason”so only 4 years overseas limit for self employed?
It’s okay, no problem. In most of the sums I’ve solved now the whole 130% is allowed so I think I’ll stick to that. Thank you for you time and effort!
Sorry for the confusion but I’m not asking for types of income that are relevant, I’m merely asking if we should extend the basic and/or higher rate band amount by gross of personal pension contributions even if it is higher than the ( the higher of £3600 or relevant earnings) tax relief limit, if not what would the treatment be?
By relevant income I meant relevant earnings that are used to compute the max tax relievable contributions, for instance if Ann had income from unfurnished lettings of £50000 in addition to her employment income, what would the basic rate band be?
I’m sorry to drag this on but I just stumbled upon Lucky Ltd in bpp and they’ve allowed a full 130% allowance for both computer and office equipment inspite of it only being a 4 month accounting period. This points to the contrary of what you’ve just confirmed could you please clarify this?
Thank youIf it is for a Ltd Co should it be pro rated when accounting period is <12 months?
