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hello Sir,
Can you please explain the deferred tax implication for the following
Cohort acquired air on 1.1.20X2
“The balance on the retained earnings of air were 2million at the date of acquisition cohort have decided that, during the three years to the date that they intend to list the shares of the company, they will realise earnings through future dividend payments from the subsidiary amounting to $500,000 per year. Tax is payable on any remittance or dividends and no dividends have been declared for the current year.”
Thanks in advanceHi
After great difficulty I have managed to find a copy of the question Cohort! Cohort controls Air and, in particular, Cohort controls Air’s dividend policy. That being so, Cohort KNOWS that there will be a $500,000 dividend for each of the next three years and is therefore preparing for those receipts because, when they do arrive, Cohort will be faced with a tax liability.
Is that ok? I hope so because I’ve deleted the question and wouldn’t want to spend time in the future trying to find it again! 🙂
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