Business Relocation

ATAX – May 2019 – L3 – Q4b – Capital Gains Tax (CGT)

Advise on capital gains arising from various business transactions, deemed disposal, and roll-over relief for Smaposu Nigeria Limited.

Question

Smaposu Nigeria Limited is based in Ibadan, Oyo State, and is involved in the manufacturing of computer accessories. The company undertook the following transactions during the year ended December 31, 2018:

(i) Plant and machinery: Part of the plant and machinery was purchased in the year 2014 at an all-inclusive price of ₦12,500,000. A machinery was sold for ₦8,100,000, and the value of the undisposed part was ₦5,740,000. Selling expenses incurred amounted to ₦150,000.

(ii) Motor vehicle: A motor vehicle, which was acquired in 2016 for ₦3,000,000 for the purpose of the business, was sold to the company’s general manager for ₦2,900,000. The market value of the car as at the point of disposal was ₦3,500,000. The company re-acquired a similar car for ₦3,500,000.

(iii) As a result of an unfavorable business climate in Ibadan, the company relocated to Ikeja, Lagos State. The land and buildings acquired in Ibadan in 2009 for ₦30,000,000 were sold for ₦65,500,000. The cost of valuation and professional fees incurred on disposal was ₦2,000,000. A reinvestment was made in Ikeja through the acquisition of another landed property valued at ₦50,000,000.

Smaposu Nigeria Limited has just appointed your firm as the company’s tax consultant.

You are required to advise the management on:

i. “Deemed” disposal of an asset. (5 Marks)
ii. The capital gains (if any) arising from these transactions. (6 Marks)
iii. The roll-over relief (if any) on re-investment made on the acquisition of new assets by the company. (4 Marks)
iv. Capital gains tax payable. (3 Marks)

Answer

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Tags: Asset Disposal, Business Relocation, Capital gains tax, Deemed Disposal, Roll-Over Relief
Level: Level 3

Topic: Capital Gains Tax (CGT)

CSME – Nov 2020 – L2 – Q1a – Environmental Analysis

Advise Cells Incorporated on the strategic management factors to consider when relocating its manufacturing plant to Dumbura Republic.

Question

Dumbura Republic is reputed for its high population density and the consequent availability of cheap labour. Surprisingly, due to the high premium placed on qualitative education in science and technology-based disciplines, the country has an abundance of highly skilled workforce suited for manufacturing industries. Other features of Dumbura Republic include adequate, accessible and reliable social infrastructure such as electricity, potable water, road and rail network, and an effective security network. Besides, the country also has a variety of tax incentives designed to attract foreign investments. These positive features of the socio-economic environment in Dumbura have attracted a lot of foreign investors, including several computer and mobile phones hardware production companies.

Indeed, the socio-economic environment in Dumbura is very business-friendly. Hence, it is not surprising that a lot of foreign companies have located their industrial plants in the country. Effects of this development include increased employment opportunities, influx of people in search of employment from neighbouring countries, spiralling rent rates for all categories of accommodation, worsening environmental pollution, and a spiking population growth rate, which is beginning to take its toll on available social infrastructure. Besides, the hitherto peaceful country is beginning to experience an increased rate of crimes such as burglary, robbery, cyber theft and kidnap that target expatriates particularly. The local population is becoming increasingly hostile to the expatriates and workers from neighbouring countries, accusing them of denying the local population access to good job opportunities.

You have been employed as a consultant to a computer and mobile phone hardware company, Cells Incorporated, which is considering relocating its major manufacturing plant from an Asian country to Dumbura Republic. This is hoped to bring down the cost of production and provide a ready market for about 20% of its products.

Required:
With the aid of Johnson, Scholes, and Whittington’s position on strategic management, advise Cells Incorporated on the elements of strategic management that must be taken into consideration in deciding whether to relocate its manufacturing plants to Dumbura Republic. Ensure that you make adequate references to the scenario above as might be relevant.

Answer

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Tags: Business Relocation, Risk Assessment, Strategic Management, Strategy implementation
Level: Level 2

Topic: Environment analysis
Series: NOV 2020

BMF – May 2021 – L1 – SA – Q6 – The Business Environment

Identifies the practice of moving jobs outside the country to take advantage of incentives.

Question

The practice of moving jobs outside the country where an organization is based in order to take advantage of incentives in the destination country is termed
A. Outsourcing
B. Outshoring
C. Offshore outsourcing
D. Offsourcing
E. Offshoring

Answer

Find Related Questions by Tags, levels, etc.

Tags: Business Relocation, Incentives, Offshore Outsourcing
Level: Level 1

Topic: The Business Environment
Series: MAY 2021

ATAX – May 2019 – L3 – Q4b – Capital Gains Tax (CGT)

Advise on capital gains arising from various business transactions, deemed disposal, and roll-over relief for Smaposu Nigeria Limited.

Question

Smaposu Nigeria Limited has just appointed your firm as the company’s tax consultant.

You are required to advise the management on:

Answer

Find Related Questions by Tags, levels, etc.

Tags: Asset Disposal, Business Relocation, Capital gains tax, Deemed Disposal, Roll-Over Relief
Level: Level 3

Topic: Capital Gains Tax (CGT)

CSME – Nov 2020 – L2 – Q1a – Environmental Analysis

Advise Cells Incorporated on the strategic management factors to consider when relocating its manufacturing plant to Dumbura Republic.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Business Relocation, Risk Assessment, Strategic Management, Strategy implementation
Level: Level 2

Topic: Environment analysis
Series: NOV 2020

BMF – May 2021 – L1 – SA – Q6 – The Business Environment

Identifies the practice of moving jobs outside the country to take advantage of incentives.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Business Relocation, Incentives, Offshore Outsourcing
Level: Level 1

Topic: The Business Environment
Series: MAY 2021

Question Tag: Business Relocation

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ATAX – May 2019 – L3 – Q4b – Capital Gains Tax (CGT)

Advise on capital gains arising from various business transactions, deemed disposal, and roll-over relief for Smaposu Nigeria Limited.

CSME – Nov 2020 – L2 – Q1a – Environmental Analysis

Advise Cells Incorporated on the strategic management factors to consider when relocating its manufacturing plant to Dumbura Republic.

BMF – May 2021 – L1 – SA – Q6 – The Business Environment

Identifies the practice of moving jobs outside the country to take advantage of incentives.

ATAX – May 2019 – L3 – Q4b – Capital Gains Tax (CGT)

Advise on capital gains arising from various business transactions, deemed disposal, and roll-over relief for Smaposu Nigeria Limited.

CSME – Nov 2020 – L2 – Q1a – Environmental Analysis

Advise Cells Incorporated on the strategic management factors to consider when relocating its manufacturing plant to Dumbura Republic.

BMF – May 2021 – L1 – SA – Q6 – The Business Environment

Identifies the practice of moving jobs outside the country to take advantage of incentives.

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ATAX – May 2019 – L3 – Q4b – Capital Gains Tax (CGT)

Advise on capital gains arising from various business transactions, deemed disposal, and roll-over relief for Smaposu Nigeria Limited.

You're reporting an error for "ATAX – May 2019 – L3 – Q4b – Capital Gains Tax (CGT)"

CSME – Nov 2020 – L2 – Q1a – Environmental Analysis

Advise Cells Incorporated on the strategic management factors to consider when relocating its manufacturing plant to Dumbura Republic.

You're reporting an error for "CSME – Nov 2020 – L2 – Q1a – Environmental Analysis"

BMF – May 2021 – L1 – SA – Q6 – The Business Environment

Identifies the practice of moving jobs outside the country to take advantage of incentives.

You're reporting an error for "BMF – May 2021 – L1 – SA – Q6 – The Business Environment"

ATAX – May 2019 – L3 – Q4b – Capital Gains Tax (CGT)

Advise on capital gains arising from various business transactions, deemed disposal, and roll-over relief for Smaposu Nigeria Limited.

You're reporting an error for "ATAX – May 2019 – L3 – Q4b – Capital Gains Tax (CGT)"

CSME – Nov 2020 – L2 – Q1a – Environmental Analysis

Advise Cells Incorporated on the strategic management factors to consider when relocating its manufacturing plant to Dumbura Republic.

You're reporting an error for "CSME – Nov 2020 – L2 – Q1a – Environmental Analysis"

BMF – May 2021 – L1 – SA – Q6 – The Business Environment

Identifies the practice of moving jobs outside the country to take advantage of incentives.

You're reporting an error for "BMF – May 2021 – L1 – SA – Q6 – The Business Environment"

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