BT 2001 Annual Report Download - page 154

Taxation of capital gains
Unless a US resident carries on a trade through a branch or agency in the UK, and the disposal of ordinary shares and/or ADSs is
related to the activities of that trade, UK capital gains tax is not charged on US residents who dispose of ordinary shares and/or
ADSs.
For US federal income tax purposes, a US Holder will recognise a capital gain or loss on the sale or other disposition of
ordinary shares or ADSs (if the ordinary shares or ADSs disposed of are held as capital assets) in an amount equal to the
di¡erence between the US Holder’s adjusted tax basis in the ordinary shares and the amount realised on the disposition. Such
gain or loss will be US source gain or loss, and will be treated as long-term capital gain or loss if the ordinary shares have been
held for more than one year. The deductibility of capital losses is subject to signi¢cant limitations. Capital gains of an individual
US Holder are subject to US federal income tax at preferential rates if speci¢ed holdings periods are met.
US information reporting and back up withholding
Dividends paid on and proceeds received from the sale or disposition of ordinary shares or ADSs may be subject to information
reporting to the IRS and back up withholding at a 31% rate. Certain exempt recipients (such as corporations) are not subject to
these information reporting requirements. Back up withholding will not apply, however, to a holder who provides a correct
taxpayer identi¢cation number or certi¢cate of foreign status and makes any other required certi¢cation or who is otherwise
exempt. US persons who are required to establish their exempt status generally must ¢le IRS Form W-9 (Request for Taxpayer
Identi¢cation Number and Certi¢cation). Non-US holders generally will not be subject to US information reporting or back up
withholding. However, such holders may be required to provide certi¢cation of non-US status in connection with payments
received in the United States or through certain US-related ¢nancial intermediaries. Finalised Treasury regulations have generally
expanded the circumstances under which US information reporting and back up withholding may apply.
Amounts withheld as back up withholding may be credited against a holder’s US federal income tax liability. A holder may
obtain a refund of any excess amounts withheld under the back up withholding rules by ¢ling the appropriate claim for refund
with the IRS and furnishing any required information.
UK stamp duty
A transfer for value of an ordinary share will generally be subject to UK stamp duty or to UK stamp duty reserve tax.
No UK stamp duty will be payable on the transfer of an ADS, provided that the separate instrument of transfer is not
executed in, and always remains outside, the UK.
Inheritance and gift taxes
US-domiciled holders of ordinary shares and ADSs generally will not be subject to UK inheritance tax on a gift of ordinary shares
and/or ADSs if the gift would be subject to US federal gift tax. Similarly, ordinary shares and/or ADSs passing on the death of a
US-domiciled shareholder generally will not be subject to UK inheritance tax if the estate would be subject to US estate tax.
Exchange controls and other limitations affecting security holders
There are currently no government laws, decrees or regulations in the United Kingdom that restrict the export or import of
capital, including, but not limited to, UK foreign exchange control restrictions, or that a¡ect the remittances of dividends or other
payments to non-resident holders of the company’s ordinary shares, except as otherwise described in Taxation (US Holders) above
and except in respect of the government of, or any resident of, Iraq or any person treated as so resident. There are no limitations
under the laws of the United Kingdom restricting the right of non-residents to hold or to vote shares in the company.
Additional information for shareholders
154 BT Annual report and Form 20-F