ANNEX A
SECRET
nO= Share Purchase Proposal
Position for a single share
A. BATEIS with 10%
Dividend C$ 1.24
Withholding Tax (15%) 0.19
1.05
46% U.S. Tax an regressed dividend of 1.94 0.89
Less Double Tax Relief
1) Withholding Tax 0.19
2) *Underlying Tax 0.70 0.89 -
Net received 1.05
regressed at 1983 effective rate of 36%
B. BARS with less than 10%
Dividend C$ 1.24
Withholding Tax (15%) 0.19
1.05
46% U.S. Tax on 1.24 0.57
Less Double Tax R&Lief withholding tax 0.19 C. 38
Net received 0.67
The difference is 1.05 0.67 C$ 0.38
with a 5% holding the difference would be:-
2,552,807 x 0.38 Cs j70,067
This caqparms to the benefit under both A & B of U.S. tax relief
cn interest on the borrowing to purchase the shares of --
pelief to BAnS 2,552,807 x C$ 37 x 14% 13?223,540
46% Cs 6,082,828
Tess Tax an interest in BATIF
1.3,223,540 @ 16.25% + C$ 2,148,825
C$ 31934,003
+ This will decline as the U.K. Corporation Tax rate declirIMS.
C)
C)
BAT Industries document for Province of British Columbia 12 April 1999