Revenue Service (“IRS”) as to any U.S. federal income tax considerations described herein. The IRS may disagree with the discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulations, administrative rulings or court decisions will not adverselydiffering interpretation could affect the accuracy of the statements and conclusions set forth in this discussion.
This discussion does not consider the U.S. federal income tax treatment of entities or arrangements treated as partnerships or other pass-through entities (including branches) for U.S. federal income tax purposes (any such entity or arrangement, a “Flow-Through Entity”) or investors that hold our securities through Flow-Through Entities. If a Flow-Through Entity is the beneficial owner of our securities, the U.S. federal income tax treatment of an investor holding our securities through a Flow-Through Entity generally will depend on the status of such investor and the activities of such investor and such Flow-Through Entity.
If you hold our securities through a Flow-Through Entity, we urge you to consult your tax advisor.
THE FOLLOWING IS FOR INFORMATIONAL PURPOSES ONLY. EACH HOLDER IS URGED TO CONSULT ITS TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO SUCH HOLDER OF EXERCISING REDEMPTION RIGHTS, INCLUDING THE EFFECTS OF U.S. FEDERAL, STATE AND LOCAL AND NON-U.S. TAX LAWS.
For purposes of this discussion, because any unit consisting of one Class A ordinary share and one third of one warrant (with a whole warrant representing the right to acquire one Class A ordinary share ) is separable at the option of the holder, the Company is treating any Class A ordinary share and one third of one warrant to acquire one Class A ordinary share held by a holder in the form of a single unit as separate instruments and is assuming that the unit itself will not be treated as an integrated instrument. Accordingly, the cancellation or separation of the units in connection with the exercise of redemption rights generally should not be a taxable event for U.S. federal income tax purposes. This position is not free from doubt, and no No assurance can be given that the IRS would not assert, or that a court would not sustain, a position contrary position.
Certain U.S. Federal Income Tax Considerations to U.S. Shareholdersany of the tax considerations described in this discussion. No advance ruling has been or will be sought from the IRS regarding any matter discussed below.
This sectiondiscussion is addressedfor general information purposes only and does not purport to U.S. Holders (as defined below)be a complete analysis of all of the Company’sU.S. federal income tax considerations that may be relevant to particular holders in light of their particular facts and circumstances, or to holders subject to special rules under the U.S. federal income tax laws, including, for example, but not limited to:
our Sponsor, founders, officers or directors;
banks and other financial institutions;
mutual funds;
insurance companies;
brokers or dealers in securities, currencies or commodities;
dealers or traders in securities subject to a mark-to-market method of accounting;
regulated investment companies and real estate investment trusts;
retirement plans, individual retirement accounts and other deferred accounts;
tax-exempt organizations, governmental agencies, instrumentalities or other governmental organizations and pension funds;
persons holding Public Shares that elect to have their Public Shares redeemed for cash as described inpart of a “straddle,” hedge, wash sale, constructive sale, or other integrated or conversion transaction or similar transaction;
U.S. holders whose functional currency is not the section entitled “Proposal One – The Extension Amendment Proposal — Redemption Rights” (“Redeeming U.S. Holders”). For purposes of this discussion, a “U.S. Holder” is a beneficial owner that is,dollar;
Partnerships, other entities or arrangements classified as partnerships for U.S. federal income tax purposes:purposes, “S corporations,” or other pass-through entities for U.S. federal income tax purposes (or investors in such entities);
expatriated entities subject to Section 7874 of the Code;
persons required to accelerate the recognition of any item of gross income as a result of such income being recognized on an individual citizen“applicable financial statement”;
persons subject to any alternative minimum tax;
persons subject to the applicable financial statement accounting rules of Section 451(b) of the Code;
U.S. expatriates and former citizens or residentlong-term residents of the United States;
a corporation (or other entity that isholders owning or treated as a corporation forowning 5% or more of our Public Shares (by vote or value);
grantor trusts; and
controlled foreign corporations, passive foreign investment companies, and corporations that accumulate earnings to avoid U.S. federal income tax purposes) that is created or organized (or treated as created or organized) in or under the laws of the United States or any state thereof or the District of Columbia;
an estate the income of which is subject to U.S. federal income taxation regardless of its source; or
any trust if (1) a U.S. court is able to exercise primary supervision over the administration of such trust and one or more United States persons (within the meaning of the Code) have the authority to control all substantial decisions of the trust or (2) it has a valid election in place to be treated as a United States person.
Tax Treatment of the Redemption — In General
Subject to the substantial exceptions described below under the heading “— Passive Foreign Investment Company Rules,” the U.S. federal income tax consequences to a Redeeming U.S. Holder of Public Shares that exercises its redemption rights to receive cash in exchange for all or a portion of its Public Shares will depend on whether the redemption qualifies as a sale of the Public Shares redeemed under Section 302 of the Code or is treated as a distribution under Section 301 of the Code. If the redemption qualifies as a sale of such Redeeming U.S. Holder’s shares, such Redeeming U.S. Holder will generally be required to recognize gain or loss in an amount equal to the difference, if any, between the amount of cash received and the tax basis of the shares redeemed. Such gain or loss should be treated as capital gain or loss if such shares were held as a capital asset on the date of the redemption. Any such capital gain or loss generally will be long-term capital gain or loss if the Redeeming U.S. Holder’s holding period for such shares exceeds one year at the time of the redemption. A Redeeming U.S. Holder’s tax basis in such Redeeming U.S. Holder’s shares generally will equal the cost of such shares.tax.
