National Grid 2008 Annual Report Download - page 405

BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 57603
Name: NATIONAL GRID
Date: 17-JUN-2008 03:10:51.35Operator: BNY99999TPhone: [phone]Site: BOWNE OF NEW YORK
Y59930.SUB, DocName: EX-2.B.7.1, Doc: 8, Page: 62
Description: EXH 2(B).7.1
0/3816.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/816/3*
BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 57603
Name: NATIONAL GRID
Date: 17-JUN-2008 03:10:51.35Operator: BNY99999TPhone: [phone]Site: BOWNE OF NEW YORK
Y59930.SUB, DocName: EX-2.B.7.1, Doc: 8, Page: 62 Description: EXH 2(B).7.1
0/3816.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/816/3*
the United Kin
g
dom for United Kin
g
dom taxation purposes. In certain circumstances, the details provided to HM Revenue and
Customs may be passed by HM Revenue and Customs to the tax authorities of certain other jurisdictions.
Additionally, persons in the United Kin
g
dom payin
g
amounts due on redemption of any Instruments which constitute deeply
discounted securities as defined in Chapter 8 of Part 4 of the Income Tax (Tradin
g
and Other Income) Act 2005 to, or receivin
g
such amounts on behalf of, another person, may also be required to comply with the provisions referred to above. However,
HM Revenue & Customs published practice indicates that HM Revenue & Customs will not exercise its power to obtain
information where such amounts are received on or before 5 April 2008.
Information may also be required to be reported in accordance with re
g
ulations made pursuant to the EU Savin
g
s Directive
(see below).
It is possible that payments under the Guarantee in respect of interest on the Instruments (or other amounts due under the
Instruments other than repayment of amounts paid for the Instruments) will not be eli
g
ible for the exemption from United
Kin
g
dom withholdin
g
tax described in para
g
raph (A)1 above. If such payments are not eli
g
ible for that exemption, they may fall
to be paid under deduction of United Kin
g
dom income tax at the basic rate (currently 22 per cent.) subject to such relief as may
be available under the provisions of any applicable double tax treaty or any other relief that may apply. For the purposes of
paragraph (B) above (Provision of Information) “interest” and “amounts payable on redemption” should be taken, for practical
purposes, as includin
g
payments made under the Guarantee in respect of interest on the Instruments and amounts payable on
redemption respectively.
Under EU Council Directive 2003/48/EC on the taxation of savin
g
s income, each Member State is required, to provide to the tax
authorities of another Member State details of payments of interest or other similar income paid by a person within its
jurisdiction to, or collected by such a person for, an
62
(
C
)
Pa
y
ments under the Guarantee
(D) Other Rules Relating to United Kingdom Withholding Tax
1. Instruments may be issued at an issue price of less than 100 per cent. of their principal amount. Any discount element on
any such Instruments should not
g
enerally be subject to any United Kin
g
dom withholdin
g
tax pursuant to the provisions
mentioned in A above, but may be subject to reporting requirements as outlined in B above.
2. Where Instruments are to be, or may fall to be, redeemed at a premium, as opposed to bein
g
issued at a discount, then
any such element of premium may constitute a payment of interest. Payments of interest are subject to United Kin
g
dom
withholdin
g
tax and re
p
ortin
g
re
q
uirements as outlined above.
3. Where interest has been paid under deduction of United Kin
g
dom income tax, Instrumentholders who are not resident in
the United Kin
g
dom may be able to recover all or part of the tax deducted if there is an appropriate provision in any
applicable double taxation treaty.
4. The references to “interest” above mean “interest” as understood in United Kin
g
dom tax law. The statements above do
not take any account of any different definitions of “interest” or “principal” which may prevail under any other law or which
may be created by the terms and conditions of the Instruments or any related documentation. Instrumentholders should
seek their own professional advice, as re
g
ards the withholdin
g
tax treatment of any payment on the Instruments which
does not constitute “interest” or “
p
rinci
p
al” as those terms are understood in United Kin
g
dom tax law.
5. The above description of the United Kin
g
dom withholdin
g
tax position assumes that there will be no substitution of an
Issuer pursuant to Condition 11.3 of the Instruments and does not consider the tax consequences of any such
substitution.
(
E
)
EU Savin
g
s Directive