Gresham Capital CLO IV B.V. - Irish Stock Exchange

Liability to Stamp Taxation and Other Charges
Purchasers of the Notes may be required to pay stamp taxes and other charges, in accordance with the laws
and practices of the country of purchase, in addition to the issue price of each Note. Potential purchasers should
consult their own tax advisers as to the tax consequences of the purchase, ownership, transfer or exercise of any
Notes or of any interest in any Notes. In addition, potential purchasers of the Notes should be aware that tax
regulations (including those relating to stamp taxation) and their application by the relevant taxation authorities
change from time to time. Accordingly, it is not possible to predict the precise tax treatment which will apply at
any given time. In particular, no representation is made as to the manner in which payments under the Notes
would be characterised by any relevant taxing authority.
Withholding Tax; Changes in Tax Law; No Gross Up
Withholding on Collateral Debt Securities. Under the Eligibility Criteria, a Collateral Debt Security will be
eligible for purchase by the Issuer if, at the time it is purchased, either the payments thereon are not subject to
withholding tax imposed by any jurisdiction or if the obligation provides for “gross-up” payments that cover the
full amount of any such withholding taxes. Where payments under the Collateral Debt Securities purchased by
the Collateral Manager on behalf of the Issuer are not subject to withholding tax at the time of acquisition by the
Collateral Manager on behalf of the Issuer this is generally as a consequence of the Issuer being able to take
advantage of a double taxation treaty between The Netherlands and the jurisdiction from which the relevant
payment is made, the current applicable law in the jurisdiction of the borrower or, in certain cases, as a result of
the fact that the Issuer has taken a Participation in such Collateral Debt Securities from a Selling Institution
which is able to pay interest payable under such Participation gross if paid in the ordinary course of its business.
As a result of a recent judgment of the UK Court of Appeal, it could be argued that payments of interest on
Collateral Debt Securities with UK Obligors cannot benefit from the interest article in the UK/The Netherlands
double taxation treaty. This would mean that UK income tax would need to be withheld (currently at a rate of
20 per cent.) from such interest payments. HM Revenue & Customs (“HMRC”) published draft guidance on 9
October 2006 setting out their approach to claims for treaty relief in circumstances where they consider that the
judgment might be considered to apply. HMRC state that benefits under a double taxation treaty will not be
denied where interest is paid to a special purpose vehicle which issues a quoted eurobond. The Notes issued by
the Issuer should be quoted eurobonds so long as they are and remain listed on the Irish Stock Exchange. It is
therefore unlikely that HMRC will seek to deny benefits under the UK/The Netherlands double taxation treaty
to UK Obligors as regards the payment of interest to the Issuer. However, the HMRC guidance is in draft form
and may therefore be subject to amendment before being finalised. It is not possible to identify whether any
such amendment may adversely affect any UK Obligor’s position as regards a claim under the UK/The
Netherlands double taxation treaty to pay interest without withholding or deduction for or on account of UK
income tax.
In the event that the Issuer receives any interest payments on any Collateral Debt Security purchased by it
net of any applicable withholding tax, the Coverage Tests and Collateral Quality Tests will be determined by
reference to such net receipts. There can be no assurance that, as a result of any change in any applicable law,
treaty, rule, regulation or interpretation thereof, the payments on the Collateral Debt Securities purchased by the
Issuer might not in the future become subject to withholding tax or increased withholding rates. In the event
that any or greater withholding tax is imposed on payments on the Collateral Debt Securities purchased by the
Issuer, such tax would reduce the amounts available to make payments on the Notes. There can be no assurance
that remaining payments on the Collateral Debt Securities purchased by the Issuer would be sufficient to make
timely payments of interest, principal on the Maturity Date and other amounts payable in respect of the Notes of
each Class. In the event the imposition of any such tax at any time after the Issue Date results in the occurrence
of a Tax Event, the holders of 66⅔ per cent. of the principal amount of the Controlling Class or the holders of
66⅔ per cent. of the principal amount outstanding of the Class N Notes may consent to the Issuer’s redemption
of the Notes in full, but not in part. See Condition 7(b) (Optional Redemption).
Withholding on Notes. The Issuer expects that payments of principal, interest and Redemption Prices in
respect of the Notes by the Issuer will not be subject to any withholding tax in The Netherlands or any other
jurisdiction. However, there can be no assurance that, as a result of any change in any applicable law, treaty,
rule, regulation, or interpretation thereof, the payments on the Notes will not in the future become subject to
withholding taxes. For example, see “Tax Considerations - EU Directive on the Taxation of Savings Income
(2003/48/EC)”. In the event that withholding or deduction of any taxes from payments of principal or interest in
respect of the Notes is required by law in any jurisdiction, the Issuer shall be under no obligation to make any
additional payments to the holders of any Notes in respect of such withholding or deduction. See “Tax
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