7
}
4.
Whether the tax implications are acceptable in this case is largely hypothetical, but the following comments are of bygder significance. In this case, Cathay would enjoy a cheaper rental because part of the depreciation allowance would accrue in their favour; before there was any question of proceeding in any case of this kind we should want to quantify the benefits. Further factors would be whether cheap finance was involved and whether the balance of payments return was significant.
5. This all means that we strongly favour a straightforward sale, and I hope you will leave both Rolls and Airlease in no doubt that the arrangement proposed by Airlease is a non-starter.
copies to:
G M Lambert
T J Wilshire
: Bank of England
:
ODM
S N Chilton
::
Department of Trade
ERC Holland
FCO
;
I E RICH