(b) Provide the directors of Acrux Ltd with a detailed explanation of the maximum rate of

(b) Provide the directors of Acrux Ltd with a detailed explanation of the maximum rate of tax that will be suffered

on both the distributed and non-distributed profits of the non-UK resident investee companies where:

(1) there is a double tax treaty between the UK and the country in which the individual companies are

resident; and

(2) there is no such double tax treaty.

Note: you are not required to explain the position of the overseas resident branches. (6 marks)

(b) Rate of tax on profits of non-UK resident investee companiesUndistributed profitsThe companies will be subject to tax in the countries in which they are resident; this is because of their residency status orbecause they have a permanent establishment