Avoendix Exchange rate assumed
C$1/9587 = El (27.1.N6)
A. Benefit of a 10% holdinz bv BATUS in IMASCO
BATUS present holding 6.8m shares
Dividends C .84c per share
BATUS reckon that the amount of the gross dividend retained would rise from
54% to 72% i.e. 18% increase. From this should be deducted 0.9% in respect
of the additional withholding tax suffered on remittance of dividend from
the U.S. to the U.K.
6.8m shares x .84c dividend x 17.1% saving = CS976,800
at CS 1.9587 = El this is E499,000 aoProx.
B. Cost of Increasina BATLIS holdiny in IMASCO to 10% throuxh share sales bv
Westanlev
4.1m shares are required to give BATUS 10% (BATUS at present holds 6.8m out
of 108.9m) Z
Capital Gains:- 4.1m at market value 27/1/86 of C$26.875 per share 56,255,000
Budget Day Value 6.4.65, E5.275 8 for bonus issues = E0.6594p, 3,244,248
+ Indexation at say 20% per share
Capital Gain 53,010,752
Minimum Tax Charge 1986 (5.17%) 2,740,655
Maximum Tax Charge (30%) 15,903,226
Interest relief in the U.S. 56,255,000 at * 9.5% = 5,344,225
at 46% 2,458,344
Plus benefits in A above 499.000
@,957,344
less reduction in interest relief U.K. 56,255,000 at 12% x 5% 421,912
2,535,432
U.S. Long-term borrowing rate end of January 1986
C. Sale of IMAT's IMASCO holding and some Westanley shares
(i) Sale of DMAT's IMASCO holding 2.6m shares no Dutch Capital Gains Tax
2.6m at C$26.875 E35,674,000
Repay loan say D. F1.25m 6,631,300 (D.F1. at 3.77 = El)
Repatriate as dividend 29,042,700 Withholding Tax 5-"' 1,452,135
Additional U.K. Tax * 1.25% 363,034
1,815,169
This rate depends on what other significant transactions producing profits
and gains take place in the year.
(ii) Sale of shares from Westanley 1.5m at CS26.875 20,581,253
Cost EO.6594p per share + indexation say 20% 1,186,920
19,394,333
Minimum Tax Charge 1986 (5.17%) 1,002,607
Maximum Tax Charge 1986 (30%.) 5,818,299 2.8m
(i) above) 1,815,169 7.6m
*Total tax charges (i) and (ii)
(iii) Savings in BATUS say as for B
PQ
C=)
KE/al
30.1.1986
xt22rdft
BAT Industries document for Province of British Columbia 12 April 1999