Elimination of Risk
12/02/1991
Query
Would the existence of a Patent Royalty Company which resulted in a return of patent income to the BES investor, offend this section?
Decision
No, if the patent company is engaged in licensing arrangements with the manufacturing company and if distributable reserves are eliminated prior to BES investment.
Income Tax
Section 489 (14), Taxes Consolidation Act, 1997
Origin: Direct Taxes International and Administration
File ref:5891/90
28/01/1992
Query
Whether a promise to investors of an asset in lieu of investment after the five year relevant investment period contravenes section 489(14).
Decision
Section 489(14) was contravened.
Income Tax
Section 489 (14), Taxes Consolidation Act, 1997
Origin: Direct Taxes International and Administration
File ref:76/92
25/07/1995
Query
(1) Whether promoters be allowed by way of agreement with fund, to withhold some of their money until it was required by the company, and they would then subscribe for the agreed number of shares, & (2) Would an agreed investment by promoters (which is required by a designated fund) offend the risk provisions?
Decision
(1) Agreed this would not eliminate risk. (2) No. It just demonstrates the commitment of the promoters to the project.
Income Tax
Section 489 (14), Taxes Consolidation Act, 1997
Origin: Direct Taxes International and Administration
File ref:6313/95