It is

$1$

$0$

th September

$2$

$0$

$2$

$3$

$.$

$$You are a member of the Tax Department of MTax Consultants, a long

$-$

established firm of accountants and tax practitioners in Limerick. The prestigious Limerick

$-$

based company Sorkin Designs Ltd

$,$

$$famous throughout Ireland for its beautiful architectural designs, is one of your firm

$$

s most important clients.

Sorkin Designs Ltd is an Irish resident company with an issued share capital of

$1$

$0$

$0$

$,$

$0$

$0$

$0$

$$

$1$

$$ordinary shares owned by the following shareholders:

Jed Sorkin

$($

director

$)$

$1$

$2$

$,$

$0$

$0$

$0$

$$

Abigail Sorkin

$($

Jed

$$

s wife

$)$

$1$

$0$

$,$

$0$

$0$

$0$

$$

Zoe Sorkin

$($

Jed

$$

s daughter

$)$

$1$

$0$

$,$

$0$

$0$

$0$

$$

Leo Sorkin

$($

director

$)$

$1$

$2$

$,$

$0$

$0$

$0$

$$

Margaret Sorkin

$($

Leo

$$

s wife

$)$

$1$

$0$

$,$

$0$

$0$

$0$

$$

Claudia Sorkin

$($

director

$)$

$1$

$2$

$,$

$0$

$0$

$0$

$$

Carol Sorkin

$($

Claudia

$$

s daughter

$)$

$1$

$0$

$,$

$0$

$0$

$0$

$$

Josephine Sorkin

$($

director

$)$

$1$

$2$

$,$

$0$

$0$

$0$

$$

Kenny Sorkin

$($

Josephine

$$

s son

$)$

$1$

$0$

$,$

$0$

$0$

$0$

$$

Sam Sorkin

$($

director

$)$

$2$

$,$

$0$

$0$

$0$

$$

The architectural profession was hit quite hard during the recent economic recession and Sorkin Designs Ltd did not escape unscathed. The company has been loss

$-$

making for many years, with losses of approximately

$$

$1$

$0$

$0$

$,$

$0$

$0$

$0$

$$brought forward at the beginning of

$2$

$0$

$2$

$3$

$.$

$$However$,$ there has been an unexpected and substantial turnaround in business during

$2$

$0$

$2$

$3$

$$and the company is now expected to earn a tax

$-$

adjusted profit, before losses brought forward, of approximately

$$

$9$

$0$

$0$

$,$

$0$

$0$

$0$

$$for the year ended

$3$

$1$

st December

$2$

$0$

$2$

$3$

$,$

$$based on the most recent projections.

Aaron Sorkin, patriarch of the Sorkin family, incorporated his architect

$$

s business in the early

$1$

$9$

$8$

$0$

$$

s

$.$

$$He took a step back from the business in

$2$

$0$

$1$

$9$

$,$

$$selling his shares and leaving it to his five children

$($

Jed

$,$

$$Leo$,$ Claudia, Josephine, and Sam, noted above

$)$

$$to manage the company

$$

s day

$-$

to

$-$

day affairs. Nevertheless, being well

$-$

known within the industry for being quite tight

$-$

fisted in terms of his company

$$

s finances, he opted to retain his directorship in order to keep a close eye on things. Despite the company

$$

s recent good fortune, Aaron has reason to believe that his family is causing undue harm to the business he built from the ground up

$.$

$$He has asked Josh Lyman, the company

$$

s newly appointed Financial Controller, to investigate the tax implications of some recent transactions between the company and its shareholders. Thus far, Josh has uncovered the following:

In January

$2$

$0$

$2$

$3$

$,$

$$the company paid

$$

$5$

$0$

$,$

$0$

$0$

$0$

$$towards Jed

$$

s membership of an exclusive golf club.

In April

$2$

$0$

$2$

$3$

$,$

$$the company gave an interest

$-$

free loan to Margaret of

$$

$8$

$0$

$,$

$0$

$0$

$0$

$.$

$$When Josh asked her when this was likely to be repaid, Margaret scoffed and said

$$

Never

$!$

$$

$$

In May

$2$

$0$

$2$

$3$

$,$

$$Claudia and Sam received a

$$

$9$

$,$

$0$

$0$

$0$

$$interest payment each from the company. Claudia and Sam gave loans of

$$

$2$

$0$

$0$

$,$

$0$

$0$

$0$

$$each to the company during

$2$

$0$

$2$

$2$

$$out of their own significant private wealth to help the company recover following the COVID

$-$

$1$

$9$

$$crisis$.$ It is anticipated that no part of the capital will be repaid by year

$-$

end, and this is the first interest payment that has been made to either of them in this regard.

In June

$2$

$0$

$2$

$3$

$,$

$$the company paid

$$

$4$

$0$

$,$

$0$

$0$

$0$

$$for Kenny

$($

aged

$1$

$6$

$)$

$$to enroll at an exclusive private school in Co

$.$

$$Dublin for the academic year

$2$

$0$

$2$

$3$

$/$

$2$

$4$

$.$

$$

In July

$2$

$0$

$2$

$3$

$,$

$$the company began renting out a commercial property that had been lying idle in Co

$.$

$$Clare$.$ Josh predicts taxable rent, after allowable expenses, for

$2$

$0$

$2$

$3$

$$to be in the region of

$$

$4$

$0$

$,$

$0$

$0$

$0$

$.$

$$This is the only other source of income for the company and is not included in the tax

$-$

adjusted profit of

$$

$9$

$0$

$0$

$,$

$0$

$0$

$0$

$$for

$2$

$0$

$2$

$3$

$$mentioned above.

In August

$2$

$0$

$2$

$3$

$,$

$$the company paid a total gross dividend of

$$

$1$

$0$

$,$

$0$

$0$

$0$

$$to the shareholders in respect of the year ended

$3$

$1$

st December

$2$

$0$

$2$

$3$

$.$

$$This was the first dividend ever paid out by the company. The Sorkin family are all Irish citizens, domiciled and resident in Ireland. Jed, Leo, Claudia, Josephine, and Sam are all full

$-$

time working directors of Sorkin Designs Ltd

$.$

$$The other shareholders are not directors and do not work for the company. Josh was appointed to his position on

$1$

st September

$2$

$0$

$2$

$3$

$.$

$$He is eager to make a good impression with the Sorkin family and with Aaron in particular. However, he has been living and working in the U

$.$

S

$.$

$$all his life and has little knowledge of the Irish Corporation Tax system

$($

although from a review of his predecessor

$$

s notes, he is vaguely aware of the importance of being deemed a

$$

close company

$$

$$for Irish tax purposes

$)$

$.$

$$Hence$,$ he has now come to you and your team for your expert advice. Based on your answers to the above, calculate the company

$$

s projected total tax liability for the year ended

$3$

$1$

st December

$2$

$0$

$2$

calculate company projected total tax liability for the year end $31$ December $2023$