Hutchison China Meditech Ltd
Following the closing of its U.S. Public Offering of ADSs, raising approximately US$101m on the Nasdaq Stock Market, we would argue that that HCN would be considered dual listed. Furthermore, in our opinion the Group may also part qualify due to the significant investment in joint ventures. In our opinion the substantial level of joint ventures could be viewed by HMRC in the same way as 'investments' i.e. this could be considered to be partially an investment company as opposed to an operating company. The growing significance of the 'Investment in joint ventures' (US$120m at 31st Dec 2015) highlights this further as does the materiality of the share of profits in the Group Income statement (6 months to 30th June 2015 net income from joint ventures US$19.4m out of total operating profit of only US$4.6m. In our opinion this runs counter to the true intention of the BPR rules and the assumption of trading risk. This is our assessment and we recommend you contact your professional adviser for further advice.
* IHT qualifying is defined as being a company an investment in which would qualify for relief for IHT planning purposes
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