Ennea Co: Profit from new Investment

This topic has 4 replies, 3 voices, and was last updated 8 years ago by John Moffat.

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March 16, 2015 at 5:17 pm #232586
P4
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In the answers of Ennea Co (J12) the return on new investment (15%) is not taxed. Can you suggest reasons why this treatment was done so?

Also will I get credit if I write down an assumption that the return and new investment will also be taxed?

I know that the Gain on disposal of NCA (Proposal 3) could be treated as before tax and after tax but what about the new investments?

Btw thank you for all your help!
March 16, 2015 at 5:28 pm #232587
P4
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I misread the question, it said 15% is the after tax rate.

So it was my fault. 😀
March 16, 2015 at 8:08 pm #232605
John Moffat
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Glad you managed to sort it out 🙂
February 12, 2018 at 6:35 pm #436629
shazmeen
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Hello sir,
Please explain part b in simpler words. Thank you:)
February 13, 2018 at 7:53 am #436712
John Moffat
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Securitisation means that instead of just getting leasing income in the future from the non-current assets, they will issue bonds (and so get money in now from the sale of the bonds) and use the income from the leasing to pay the interest on the bonds.

So…..instead of getting cash each year from the leasing, they get a ‘lump sum’ now from the sale of the bonds.
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