LCP Proudreed PLC - Irish Stock Exchange

UNITED KINGDOM TAXATION
The following, which applies only to persons who are the absolute beneficial owners of the Notes and who
hold the Notes as investments, is a summary of the Issuer’s understanding of the law and published practice
in the United Kingdom as at the date of this Offering Circular in relation to certain aspects of the United
Kingdom taxation of payments in respect of, and of the issue and transfers of, the Notes. The comments do
not deal with all United Kingdom tax aspects of acquiring, holding or disposing of the Notes. Special rules
may apply to certain classes of taxpayer (such as dealers). The comments are made on the assumption that
there will be no substitution of the Issuer and do not consider the tax consequences of any such substitution.
Prospective Noteholders who are in any doubt as to their tax position or who may be subject to Tax in a
jurisdiction other than the United Kingdom are particularly advised to seek their own professional advice.
United Kingdom Withholding Tax on payments of interest on the Notes
The Notes will constitute ‘‘quoted Eurobonds’’ within the meaning of section 349 of the Income and
Corporation Taxes Act 1988 provided they are and continue to be listed on a recognised stock exchange
within the meaning of section 841 Income and Corporation Taxes Act 1988. On the basis of HMRC’s
published interpretation of the relevant legislation, the Irish Stock Exchange is a recognised stock
exchange for these purposes. Accordingly, payments of interest on the Notes may be made without
withholding or deduction for or on account of United Kingdom income tax provided the Notes remain so
listed at the time of payment.
In all other cases an amount must be withheld on account of income tax at the lower rate (currently 20%),
subject to any direction to the contrary by HMRC under an applicable double taxation treaty, and except
that the withholding obligation is disapplied in respect of payments to Noteholders who the Issuer
reasonably believes are either a UK resident company or a non-UK resident company carrying on a trade
in the UK through a permanent establishment which is within the charge to corporation tax, or fall within
various categories enjoying a special tax status (including charities and pension funds), or are partnerships
consisting of such persons (unless HMRC directs otherwise).
Interest on the Notes constitutes UK source income for tax purposes and, as such, may be subject to
income tax by direct assessment even where paid without withholding. However, interest with a UK
source received without deduction or withholding on account of UK tax will not be chargeable to UK tax
in the hands of a Noteholder who is not resident for tax purposes in the UK unless that Noteholder:
(i) carries on a trade, profession or vocation in the UK through a UK branch or agency or, if that
Noteholder is a company, through a UK permanent establishment, in connection with which the interest
is received or to which the Notes are attributable; or (ii) is a trustee of a trust with a UK beneficiary. There
are exemptions for interest received by certain categories of agent (such as some brokers and investment
managers). The provisions of any applicable double taxation treaty may also be relevant for such
Noteholders.
Provision of Information
Any Paying Agent or other person by or through whom interest is paid to, or by whom interest is received
on behalf of, an individual (whether resident in the UK or elsewhere) may be required to provide
information in relation to the payment and the individual concerned to HMRC. HMRC may communicate
information to the tax authorities of other jurisdictions.
European Union Directive on the Taxation of Savings Income
Directive 2003/481 EC provides for the tax authorities of Member States to provide each other with
details of payments of interest and similar income made to individuals but permits Austria, Belgium and
Luxembourg instead to impose a withholding tax on payments concerned for a ‘‘transitional period’’
(although it also provides that no such withholding tax should be levied where the beneficial owner of the
payment authorises an exchange of information and/or where the beneficial owner presents a certificate
from the tax authority of the Member State in which the beneficial owner is resident). The Directive does
not preclude Member States from levying other types of withholding tax. The attention of Noteholders
is drawn to Condition 9 (Taxation).
Transfer of the Notes
UK corporation taxpayers
In general, Noteholders which are within the charge to UK corporation tax (other than investment trusts,
venture capital trusts, authorised unit trusts and open-ended investment companies) will be treated for tax
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