Barclays 2005 Annual Report Download - page 311

Barclays PLC
Annual Report 2005 309
3.6
Taxation of US holders
Taxation of dividends
A US holder is subject to US federal income taxation on the gross
amount of any dividend paid by Barclays PLC or the Bank, as applicable,
out of its current or accumulated earnings and profits (as determined
for US federal income tax purposes). Dividends paid to a non-corporate
US holder in taxable years beginning before 1st January 2009 that
constitute qualified dividend income will be taxable to the holder at
a maximum tax rate of 15%, provided that the holder has a holding
period of the shares or ADSs of more than 60 days during the 121-day
period beginning 60 days before the ex-dividend date (or, in the case of
preference shares or ADSs relating thereto, if the dividend is attributable
to a period or periods aggregating over 366 days, provided that the
holder holds the shares or ADSs for more than 90 days during the
181-day period beginning 90 days before the ex-dividend date) and
meets certain other holding period requirements. Dividends paid by
Barclays or the Bank, as applicable, with respect to the ordinary or
preference shares or ADSs will generally be qualified dividend income.
A US holder will not be subject to UK withholding tax. The US holder
will include in gross income for US federal income tax purposes the
amount of the dividend actually received from Barclays or the Bank.
Dividends must be included in income when the US holder, in the
case of shares, or the Depositary, in the case of ADSs, actually or
constructively receives the dividend, and will not be eligible for the
dividends-received deduction generally allowed to US corporations in
respect of dividends received from other US corporations. Dividends will
be income from sources outside the US, but dividends paid in taxable
years beginning before 1st January 2007 will generally be ‘passive
income’ or ‘financial services income,’ and dividends paid in taxable
years beginning after 31st December 2006 will, depending on the
holder’s circumstances, be ‘passive’ or ‘general’ income which, in either
case, is treated separately from other types of income for the purposes
of computing any allowable foreign tax credit.
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
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. Capital gain of a non-
corporate US holder that is recognised before 1st January 2009 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 the Bank 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.
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, a US holder generally is not
subject to UK inheritance tax.
Exchange controls and other limitations affecting security holders
Other than certain emergency restrictions 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 the Bank, or under current UK
laws, which limit the right of non-resident or foreign owners, 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 Assistance located at 100F Street, NE,
Washington DC 20549-0213. 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 in the website maintained
by the SEC at www.sec.gov.