Masters Case Study
The T and A Repurchase Proposal
1. Whether Taite and Aramis would be operating through a permanent establishment, and discuss the role the permanent establishment plays in determining their liability to tax in Australia.
2. 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,
3. The deductibility of the expected losses after repurchase
4. Whether the fact the land is trading stock for the subsidiary means they will be exempt from CGT on the sale of the subsidiary
5. Identify the business risks associated with this plan and suggest some risk management strategies.