Edit: Scion (Z hotels)

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<p>Dear Stephen, We typically look at 3 factors in determining the net position. Capital/debt, profit and tax. Partners originally contributed a total of £3,500,001 to the partnership, of which £3,501 was capital and £3,496,500 was debt. Subsequently £167,510 of the debt was repaid to partners following a partial loan repayment. That leaves the current total capital/loan balance outstanding as £3,332,491. The last valuation at £1.5m represents approx. 45% of the capital/loan balance outstanding. In addition the partnership has so far distributed £546,875 of realised profits to partners as drawings and there was at 5 April 2022 approx. £30,000 of undrawn realised profits. (Realised profits exclude movements in the value of the Partnership’s investment property). Although HMRC have not yet concluded their enquiries (for reasons we have previously explained) we understand that HMRC have provisionally given relief for 90% of the Business Premises Renovation Allowances tax relief claim and for various other capital allowances. Therefore, the assumed current value of the deemed tax relief is 50% of £2,969,596 (being 90% of the BPRA claim and 100% of all other losses which can be offset against other income) i.e. £1,484,798. Assuming the Hotel could in fact be sold at £1,500,000, after taking into account the loan previously repaid, profits distributed and assumed tax relief, partners should be in a surplus position of circa £200k. We trust this assists.</p>

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