Anne earned emoluments as a marketing manager with Jabem Chocolate Ltd. Jablem did not have an ESOP plan. In 2008 as a member of the management team she was offered shares in jablem which she could purchase at 50%of their marketable value. She borrowed the money from her credit union and paid for the shares in full. In 2009 jablem paid a dividend which Anne brought to account in her annual return. In 2010 and 2013 Anne received no dividends in respect of the jablem shares. In filling her returns for these years, Anne claimed deductions for the interest paid on the money she had borrowed from her credit union. Discuss whether it is likely that the interest expense will be allowable by the commissioners in the years when no dividends were earned. In your answer make reference to Thwaites v CIT{Jamaica, 1973}; woodroffe v CIT (Grenada, 1966), wharf properties limited v commissioners of inland revenue (Hong Kong 1997).
Anne earned emoluments as a marketing manager with Jabem Chocolate Ltd. Jablem did not have an ESOP plan. In 2008 as a member of the management team she was offered shares in jablem which she could purchase at 50%of their marketable value. She borrowed the money from her credit union and paid for the shares in full. In 2009 jablem paid a dividend which Anne brought to account in her annual return. In 2010 and 2013 Anne received no dividends in respect of the jablem shares. In filling her returns for these years, Anne claimed deductions for the interest paid on the money she had borrowed from her credit union. Discuss whether it is likely that the interest expense will be allowable by the commissioners in the years when no dividends were earned. In your answer make reference to Thwaites v CIT{Jamaica, 1973}; woodroffe v CIT (Grenada, 1966), wharf properties limited v commissioners of inland revenue (Hong Kong 1997).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Anne earned emoluments as a marketing manager with Jabem Chocolate Ltd. Jablem did not have an ESOP plan. In 2008 as a member of the management team she was offered shares in jablem which she could purchase at 50%of their marketable value. She borrowed the money from her credit union and paid for the shares in full. In 2009 jablem paid a dividend which Anne brought to account in her annual return. In 2010 and 2013 Anne received no dividends in respect of the jablem shares. In filling her returns for these years, Anne claimed deductions for the interest paid on the money she had borrowed from her credit union.
Discuss whether it is likely that the interest expense will be allowable by the commissioners in the years when no dividends were earned. In your answer make reference to Thwaites v CIT{Jamaica, 1973}; woodroffe
v CIT (Grenada, 1966), wharf properties limited v commissioners of inland revenue (Hong Kong 1997).
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