Barclays 2009 Annual Report Download - page 336

334 Barclays PLC Annual Report 2009 www.barclays.com/annualreport09
Shareholder information
continued
United States and will, depending on a US holder’s circumstances, be either
‘passive’ or ‘general’ income for purposes of computing the foreign tax
credit allowable to a US holder.
The amount of the dividend distribution includable in income will be the
US Dollar value of the Pound Sterling payments made, determined at the
spot Pound Sterling/US Dollar rate on the date the dividend distribution is
includable in income, regardless of whether the payment is in fact converted
into US Dollars. Generally, any gain or loss resulting from currency exchange
fluctuations during the period from the date the dividend payment is
includable in income to the date the payment is converted into US Dollars
will be treated as ordinary income or loss and, for foreign tax credit limitation
purposes, from sources within the US and will not be eligible for the special
tax rate applicable to qualified dividend income.
Distributions in excess of current or accumulated earnings and profits, as
determined for US federal income tax purposes, will be treated as a return
of capital to the extent of the US holder’s basis in the shares or ADSs and
thereafter as capital gain.
Taxation of capital gains
Subject to PFIC rules discussed below, generally, US holders will not be subject
to UK tax, but will be subject to US tax on capital gains realised on the sale or
other disposition of ordinary shares, preference shares or ADSs. Generally, a
US holder will recognise capital gain or loss for United States federal income
tax purposes equal to the difference between the US dollar value of the
amount realised and a US holder’s tax basis, determined in US Dollars, in its
shares or ADSs. Capital gain of a noncorporate US holder that is recognised
in taxable years beginning before 1st January 2011 is generally taxed at a
maximum rate of 15% where the holder has a holding period of greater
than one year. The gain or loss will generally be income or loss from sources
within the United States for foreign tax credit limitation purposes.
Taxation of premium on redemption or purchase of shares
No refund of tax will be available under the Treaty in respect of any premium
paid on a redemption of preference shares by Barclays Bank PLC or on a
purchase by Barclays PLC of its own shares. For US tax purposes, redemption
premium generally will be treated as an additional amount realised in the
calculation of gain or loss.
Taxation of passive foreign investment companies (PFICs)
Barclays PLC and Barclays Bank PLC believe that their respective shares
and ADSs should not be treated as stock of a PFIC for US federal income
tax purposes, but this conclusion is a factual determination that is
made annually and thus may be subject to change. If Barclays PLC or
Barclays Bank PLC were to be treated as a PFIC, unless a US holder elects to
be taxed annually on a mark to market basis with respect to the shares or
ADSs, gain realised on the sale or other disposition of their shares or ADSs
would in general not be treated as capital gain. Instead, for a US holder, such
gain and certain ‘excess distributions’ would be treated as having been
realised rateably over the holding period for the shares or ADSs and would
be taxed at the highest tax rate in effect for each such year to which the
gain was allocated, together with an interest charge in respect of the tax
attributable to each such year. With certain exceptions, a US holder’s shares
or ADSs will be treated as stock in a PFIC if Barclays PLC or Barclays Bank PLC
was a PFIC at any time during such holder’s holding period in their shares or
ADSs. Dividends that a US holder receives will not be eligible for the special
tax rates applicable to qualified dividend income if Barclays PLC or Barclays
Bank PLC are treated as a PFIC with respect to such US holder either in the
taxable year of the distribution or the preceding taxable year, but instead
will be taxable at rates applicable to ordinary income.
Stamp duty
No UK stamp duty is payable on the transfer of an ADS, provided that the
separate instrument of transfer is not executed in, and remains at all times
outside, the UK.
Estate and gift tax
Under the Estate and Gift Tax Convention between the United Kingdom and
the United States, a US holder generally is not subject to UK inheritance tax.
Exchange controls and other limitations affecting security holders
Other than certain economic sanctions which may be in force from time
to time, there are currently no UK laws, decrees or regulations which would
affect the transfer of capital or remittance of dividends, interest and other
payments to holders of Barclays securities who are not residents of the UK.
There are also no restrictions under the Articles of Association of either
Barclays PLC or Barclays Bank PLC, or (subject to the effect of any such
economic sanctions) under current UK laws, which relate only to non-
residents of the UK, and which limit the right of such non-residents to hold
Barclays securities or, when entitled to vote, to do so.
Documents on display
It is possible to read and copy documents that have been filed by
Barclays PLC and Barclays Bank PLC with the US Securities and Exchange
Commission at the US Securities and Exchange Commission’s office of
Investor Education and Advocacy located at 100 F Street, NE, Washington
DC 20549. Please call the US Securities and Exchange Commission at
1-800-SEC-0330 for further information on the public reference rooms and
their copy charges. Filings with the US Securities and Exchange Commission
are also available to the public from commercial document retrieval services,
and from the website maintained by the US Securities and Exchange
Commission at www.sec.gov.