__________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 12, 1996
MORGAN STANLEY GROUP INC.
(Exact name of registrant as specified in its charter)
Delaware 1-9085 13-2838811
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification
No.)
1585 Broadway, New York, New York 10036
(Address of principal executive offices including zip code)
Registrant's telephone number, including area code: (212) 761-4000
______________________________________________________________________
Item 7(c). Exhibits
8.20 Tax Opinion of Davis Polk & Wardwell, dated August 12, 1996,
relating to the registrant's Equity Linked Notes due December
31, 1999, as described in Pricing Supplement No. 23 dated
August 5, 1996 to the Prospectus Supplement dated May 1, 1996
and the Prospectus dated May 1, 1996 related to Registration
Statement No. 333-01655.
8.21 Tax Opinion of Davis Polk & Wardwell, dated August 12, 1996,
relating to the registrant's Equity Linked Notes due August 12,
1997, as described in Amendment No. 1 to Pricing Supplement No.
27 dated July 19, 1996 to the Prospectus Supplement dated May
2, 1996 and the Prospectus dated May 1, 1996 related to
Registration Statement No. 333-01655.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MORGAN STANLEY GROUP INC.
Registrant
-----------------------------
Name: Patricia A. Kurtz
Title: Assistant Secretary
Date: August 16, 1996
Index to Exhibits
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Exhibit No. Description
- ----------- -----------
8.20 Tax Opinion of Davis Polk & Wardwell,
dated August 12, 1996, relating
to the registrant's Equity Linked Notes
due December 31, 1999, as described in
Pricing Supplement No. 23 dated August 5,
1996 to the Prospectus Supplement dated
May 1, 1996 and the Prospectus dated May
1, 1996 related to Registration Statement
No. 333-01655.
8.21 Tax Opinion of Davis Polk & Wardwell,
dated August 12, 1996, relating
to the registrant's Equity Linked Notes
due August 12, 1997, as described in
Amendment No. 1 to Pricing Supplement No.
27 dated July 19, 1996 to the Prospectus
Supplement dated May 2, 1996 and the
Prospectus dated May 1, 1996 related to
Registration Statement No. 333-01655.
Exhibit 8.20
DAVIS POLK & WARDWELL
450 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(212) 450-4571
August 12, 1996
Morgan Stanley Group Inc.
1585 Broadway
New York, NY 10036
Re: Morgan Stanley Group Inc.
Equity Linked Notes Due December 31, 1999
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Dear Sirs:
We have acted as special tax counsel for you in connection with the
issuance of your $17,375,000 aggregate principal amount Equity Linked Notes
Due December 31, 1999 (the "Notes"), which are issued on August 12, 1996. In
our opinion, the discussion set forth below is a summary of the material U.S.
federal income tax considerations that are generally relevant to holders of
the Notes. The summary is based on tax laws in effect as of the date hereof,
which are subject to change by legislative, judicial or regulatory action that
in some cases may have retroactive effect. This summary does not address all
of the tax considerations that may be relevant to a holder in light of such
holder's particular circumstances. In particular, this summary addresses only
persons who hold Notes as capital assets within the meaning of Section 1221 of
the Internal Revenue Code of 1986 (the "Code"), and does not deal with persons
subject to special rules, such as foreign persons, certain financial
institutions, insurance companies, dealers in options or securities or
purchasers holding Notes as a part of a hedging transaction or straddle or as
part of a "synthetic security" or other integrated investments. This summary
also does not deal with holders other than initial holders of the Notes who
purchase Notes at the Issue Price.
The Notes will be treated as debt for United States federal income
tax purposes. Although Treasury regulations addressing the treatment of
contingent debt instruments were issued on December 15, 1994, such
regulations, which generally would require current accrual of contingent
amounts and would affect the character of gain on the sale, exchange or
retirement of a Note, by their terms apply only to debt instruments issued on
or after August 13, 1996.
Under existing general United States federal income tax principles, a
United States Holder will not be required to include as income any increase in
value of a Note attributable to the Supplemental Payment Amount feature before
its sale, exchange, or the Determination Date. It is unclear under existing
law whether the payment of the Supplemental Payment Amount, if any, will be
treated as ordinary or capital in character. We understand that subject to
further guidance from the Internal Revenue Service, the Company intends to
treat such gain as interest income and to report such amount accordingly.
Prospective investors should be urged to consult their tax advisors regarding
the character of any such gain.
United States Holders that have acquired debt instruments that are
similar to the Notes and have accounted for such debt instruments in a
consistent manner (including under proposed, but subsequently withdrawn,
Treasury regulations) may be deemed to have established a method of tax
accounting. In such instance, the United States Holder would be required to
apply such method of tax accounting to the Notes, unless consent of the
Commissioner of the Internal Revenue Service is obtained to change such
method.
Any gain or loss recognized on the sale or exchange of a Note prior
to maturity will be treated as capital in character.
Certain noncorporate United States Holders may be subject to backup
withholding at a rate of 31% on payments of principal, premium and interest
(including original issue discount, if any) on, and the proceeds of
disposition of, a Note. Backup withholding will apply only if the Holder (i)
fails to furnish its Taxpayer Identification Number ("TIN") which, for an
individual, would be his Social Security number, (ii) furnishes an incorrect
TIN, (iii) is notified by the Internal Revenue Service that it has failed to
properly report payments of interest and dividends or (iv) under certain
circumstances, fails to certify, under penalty of perjury, that it has
furnished a correct TIN and has not been notified by the Internal Revenue
Service that it is subject to backup withholding for failure to report
interest and dividend payments. United States Holders should consult their tax
advisors regarding their qualification for exemption from backup withholding
and the procedure for obtaining such an exemption if applicable.
The amount of any backup withholding from a payment to a United States
Holder will be allowed as a credit against such Holder's United States federal
income tax liability and may entitle such Holder to a refund, provided that
the required information is furnished to the Internal Revenue Service.
There can be no assurance that the ultimate tax treatment of the Note
would not differ significantly from the description herein. Prospective
investors should be urged to consult their tax advisors as to the possible
consequences of holding the Notes.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement relating to the offering of the Notes. We also consent
to the use of our name under the caption "United States Federal Taxation" in
the pricing supplement relating to the Notes (the "Pricing Supplement").
Capitalized terms appearing herein and not defined have the meanings assigned
to such terms in the Pricing Supplement.
Very truly yours,
Exhibit 8.21
DAVIS POLK & WARDWELL
450 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(212) 450-4571
August 12, 1996
Morgan Stanley Group Inc.
1585 Broadway
New York, NY 10036
Re: Morgan Stanley Group Inc.
Equity Linked Notes Due August 12, 1997
Dear Sirs:
We have acted as special tax counsel for you in connection with the
issuance of your $2,500,000 aggregate principal amount Equity Linked Notes Due
August 12, 1997 (the "Notes"), which are issued on August 12, 1996. In our
opinion, the discussion set forth below is a summary of the material U.S.
federal income and estate tax considerations that are generally relevant to
holders of the Notes. The summary is based on tax laws in effect as of the
date hereof, which are subject to change by legislative, judicial or
regulatory action that in some cases may have retroactive effect. This
summary does not address all of the tax considerations that may be relevant to
a holder in light of such holder's particular circumstances. In particular,
this summary does not deal with persons subject to special rules, such as
persons other than Foreign Holders, nonresident alien individuals that have
lost United States citizenship or that have ceased to be treated as resident
aliens, corporations that are treated as foreign or domestic personal holding
companies, controlled foreign corporations, or passive foreign investment
companies and Foreign Holders that are owned or controlled by persons subject
to United States income tax. This summary also does not deal with holders
other than initial holders of the Notes who purchase Notes at the Issue Price.
Persons considering the purchase of the Notes should consult with their own
tax advisors with regard to the application of the United States federal
income and estate tax laws to their particular situations as well as any tax
consequences arising under the laws of any state, local or foreign tax
jurisdiction.
The Notes will be treated as debt of the Company for United States
federal income tax purposes. Accordingly, a Foreign Holder will generally not
be subject to United States federal income taxes, including withholding taxes,
on the payments of the Par and the Supplemental Redemption Amount, if any, on
a Note, or any gain arising from the sale or disposition of a Note, provided
that (i) any such income is not effectively connected with the conduct of a
trade or business within the United States, (ii) such Foreign Holder is not a
person who owns (directly or by attribution) ten percent or more of the total
combined voting power of all classes of stock of the Company, (iii) the
Foreign Holder (if an individual) is not present in the United States 183 days
or more during the taxable year of the disposition, and (iv) the Foreign
Holder does not have a "tax home" (as defined in section 911(d)(3) of the
Code) or an office or other fixed place of business in the United States.
The 31% "backup" withholding and information reporting requirements
will generally not apply to the payments by the Company or its agents of the
Par and the Supplemental Redemption Amount, if any, and to proceeds of the
sale or redemption of a Note before maturity, with respect to a Foreign
Holder. Any amounts withheld from a payment to a Foreign Holder under the
backup withholding rules will be allowed as a credit against such Holder's
United States federal income tax liability and may entitle such Holder to a
refund, provided that the required information is furnished to the United
States Internal Revenue Service (the "Service").
A Note held by an individual who at the time of his death is not a
citizen or domiciliary of the United States will not be subject to United
States federal estate tax as a result of such individual's death, provided
that (i) interest paid to such individual on such Note would not be
effectively connected with the conduct by such individual of a trade or
business within the United States and (ii) such individual is not a person who
owns (directly or by attribution) ten percent or more of the total combined
voting power of all classes of stock of the Company.
Prospective investors should be urged to consult their tax advisors
as to the possible consequences of holding the Notes.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement relating to the offering of the Notes. We also consent
to the use of our name under the caption "United States Federal Taxation" in
the pricing supplement relating to the Notes (the "Pricing Supplement").
Capitalized terms appearing herein and not defined have the meanings assigned
to such terms in the Pricing Supplement.
Very truly yours,
