Cross Oak Inns plc - The Tax Shelter Report

any information in relation to the Offer without the consent of Vantis, to reimburse any out of
pocket expenses incurred by Vantis and also to indemnify Vantis against any loss suffered by
Vantis arising directly or indirectly out of the engagement.
9. Taxation
The statements below are intended only as a general guide to the current law and practice in relation
to UK taxation and may not apply to certain persons who hold shares in the Company or who are not
resident or ordinarily resident in the UK. Any persons who are in any doubt about their tax position are
strongly advised to consult their own professional adviser.
9.1 Taxation of Dividends
9.1.1 Under UK taxation legislation, no tax is withheld at source from dividend payments made by the
Company. The requirement for companies to pay advance corporation tax (“ACT”) on making
dividend payments was abolished with effect from 5 April 1999 and does not apply to dividend
payments after that date.
9.1.2 Dividends paid on or after 6 April 1999 carry an associated notional tax credit of one-ninth of
the net dividend. Basic rate taxpayers have no further tax to pay on the dividend but nontaxpayers
will not be entitled to any repayment of the associated tax credit. Higher rate
taxpayers will have an additional liability, after taking account of the associated tax credit, which
will put them in the same after-tax position as with a dividend under the previous rules.
9.1.3 Trustees of discretionary trusts, liable to account for income tax at the rate applicable to trusts,
will be liable to tax at the Schedule F Trust rate of 32.5 per cent.
9.1.4 UK resident corporate Shareholders will not normally be liable to UK corporation tax or income
tax on any dividends received from the Company.
9.1.5 Shareholders who are resident in countries other than the UK may be entitled to a credit for all
or a proportion of the associated tax credit. Shareholders not resident in the UK should consult
their own tax adviser on the application of such provisions and the procedure for claiming relief.
9.2 Taxation of Chargeable Gains. A subsequent disposal of Shares may result in a liability to
United Kingdom taxation of chargeable gains, depending upon individual circumstances.
9.3 Stamp Duty and Stamp Duty Reserve Tax (“SDRT”)
9.3.1 No liability to stamp duty or SDRT should arise on the allotment of the Shares by the Company
under the Offer.
9.3.2 Subsequent sales of Shares (outside CREST) will generally be liable to ad valorem stamp duty,
at the rate of 50p per £100 (or part thereof) on the amount or value of the consideration.
However, where an instrument of transfer which completes an unconditional agreement to
transfer shares is duly stamped within six years after the agreement was entered into (or it
became unconditional) the stamp duty paid will cancel the SDRT liability and any SDRT paid can
be recovered. The information above is a general summary of certain tax provisions and should
not be construed as constituting advice. Potential investors should obtain advice from their own
investment or taxation adviser.
9.4 Enterprise Investment Scheme
Information on the tax reliefs available is set out in Part VI to this document.
10. Working Capital
The Directors are of the opinion, having made due and careful enquiry, that, after taking into
account the net proceeds of the Offer, and the indicative banking terms, the working capital of
the Company is sufficient for its present requirements, that is, for at least a period of 12 months
from the date on which this document was issued.
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