CJA Ltd is a resident company engaged in Real Estate Business. As part of efforts to diversify its operations, it plans

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Cja Ltd Is A Resident Company Engaged In Real Estate Business As Part Of Efforts To Diversify Its Operations It Plans 1 (84.44 KiB) Viewed 30 times

CJA Ltd is a resident company engaged in Real Estate Business. As part of efforts to diversify its operations, it plans to acquire interest in Don-bill Ltd another resident company. At the last AGM held on 4th March 2017, some Shareholders were of the view that CJA should acquire 15% of the shares of Don-bill Ltd. The Managing Director of CJA was of the view that the Company should rather invest and acquire 25% shares to give it enormous influence in Don-bill Ltd. Your firm has been identified to give a professional advice on the two proposals to help in decision making. Required: What is the tax implication on the two proposals and which proposal will you advise CJA Ltd to adopt to leverage on the tax benefits (10 marks)