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Private Ryan .. so where can I find the records of tax losses or otherwise for motif inc is there a site that would have those records?
B1ll, closing price £8.50p
The foreign permanent enterprise only applies where the company carries on business abroad through a branch. There is no separate foreign company merely an overseas branch or office of the U.K. company. Our situation involved a US Separate COmpany That election doesn’t apply therefore.
Hope that helps Mark
Clarification from bobby? Behave yourself. Lol
Hi Kettle good to see you and hope you are all well and good. Merely looking for clarification....I mean we all like to base our investments on facts :)
Please stop poking the Pug it’s cruel
Bobby....when you say ‘tax expert’ I believe you are referring to a post Privateryan was replying to a while back 11th/12th of June I think from memory. BUT Privateryan never said HE was a tax expert, private Ryan was taking the Michael out of another poster who said they were a tax expert and saying how a new company involved in an RTO COULD use the losses.
Just for clarification is this correct Privateryan, you never said you were a tax expert?
Go on Bobby Flamingo.....make a prediction for today....
It's all irrelevant anyway if no RTO happens, so lets see what happens in the next 22 trading days, but GL
Which tax expert BF ? PWC SC or HM Custom and excise?
A UK resident company is liable to corporation tax on its worldwide profits, including those of its overseas branches.
Finance Act 2011 introduced an election (CTA 2009, s. 18A) that allows a company to exempt the ‘relevant profits’ from all (and not just some) of its foreign PEs by omitting them from the company’s UK taxable profits. It also means that any corresponding losses are not allowable in the UK. Companies need to consider whether the lack of UK tax relief for losses outweighs the benefits of not being taxed on their PE’s profits.
Relevant question is did they elect to exempt themselves?
To be honest it’s actually neither her nor there but I would like to know for certain.
Like i said earlier "i'll go with the tax expert"
I can’t find any record of them electing to be exempt subject to the 2011 finance act exemptions ? I’m confused there seems to be conflicting rules and untill we know what status they elected to have been treated under it seems hard to tell 100%
Yes Motif inc was managed and controlled in the us. A us resident subsidiary of a U.K. holding company.
A U.K. company is taxed on worldwide income. So if motif inc had profits AND paid those as dividends to the U.K. owner the U.K. company would be taxed on that income. If no dividend is paid then there is no U.K. income to tax for corporation tax purposes. They are separate entities. If motif inc was a branch that would be different but it wasn’t.So The US losses cannot be offset in any way against the U.K. company profits There is no group loss relief either in these circumstances.
I’m trying to remember from memory but didn’t it all hinge around where the company was incorporated and registered ?
@private Ryan so what are we misunderstanding if this is wrong I genuinely want to know.
Motif is a U.K. registered company paying tax on its worldwide income in the U.K. motif inc is a wholly owned subsidiary that is no longer trading losses and profits flow up to the parent company regardless .... given the PWC and SC interpretations why would there be no tax implications positive or negative anymore?
A little knowledge is a dangerous thing. I worked at pwc for a while! There are many reasons why the losses are lost I only quoted the main reason. You cannot use US losses Against a U.K. company’s profits . This myth keeps resurfacing.
lol maybe Boris can get onto Donald and ask for some cash back for Motif and ask for the price of chlorinated chicken @ the same time....lol
Bobby can you point us to this post please? as the discussions of tax were actually before you came onto this board! And as Mark@1973 said you are willing to take a 'oh I am a tax expert' (whilst the guy is on his play station eating his third packet of crisps and refusing to clean his room for his mum) over PWC?
Really Bobby please try harder! Tick Tock Bobby Tick Tock....your team doesn't have much time to get those shares ;)
BF so your gonna go with the” tax expert “ on this board rather than PWC or SC articles .... wow! and when that doesn’t work you flip back to blurring the lines on the suspension/delisting argument .....
I did take the filter off but think it’s time to put it back .... the intu board are probably missing your insights this morning.
Mark@1973 looks clear to me too, thank you for your research. Yes I thought this had been discussed multiple times on here already and had been clarified it would be applicable.
There has been a tax expert on here and he said "tax losses won't be able to be reclaimed because taxes were paid in America" I will go with his assessment of it, but we will see if a RTO is even done in the next 22 trading days after today, if no ext they will be suspended on the 28th of July.....GL
Maybe I’m misunderstanding this but it seems pretty clear to me.
Corporate - Income determination
Last reviewed - 06 January 2020
A UK resident company is taxed on its worldwide total profits.
Total profits are the aggregate of (i) the company's net income from each source and (ii) the company's net chargeable gains arising from the sale of capital assets.
The main sources of income are (i) profits of a trade, (ii) profits of a property business, (iii) non-trading profits (or losses) from loan relationships, mainly interest receivable or payable, (iv) non-trading gains (or losses) on most intangible fixed assets, and (v) non-exempt dividends or other company distributions. The amount of income for sources (i) to (iv) is measured based on the company’s accounts, with specific adjustments. Taxable income from non-exempt dividends and calculating chargeable gains or income from other sources is based on actual amounts.
Section (iv)
As I understand yes but it’s limited, there are rules and loopholes but someone a while back who knows much more about it than me said it would apply. There is a maximum amount claimable I’m not sure what that amount is but because Motif is a U.K. company paying tax in the U.K. and motif inc was a wholly owned subsidiary then we would pay tax on worldwide income in the U.K. and as such be able to offset losses up to the the maximum allowed under the overseas income allowance in the calculation of such losses.
If we was registered abroad it would be different.