LCP Proudreed PLC - Irish Stock Exchange

purposes as realising profits, gains or losses (including exchange gains and losses) in respect of the Notes
on a basis which is broadly in accordance with their statutory accounting treatment so long as the
accounting treatment is in accordance with, for accounting periods beginning on or before 31 December
2004, a mark-to-market basis or an accruals basis which is authorised for tax purposes or, for accounting
periods beginning on or after 1 January 2005, generally accepted accounting practice as that term is
defined for tax purposes. Such profits, gains and losses (or, where the Noteholder’s functional currency is
not sterling, then the sterling equivalent of such profits, gains and losses as computed in the Noteholder’s
functional currency) will be taken into account in computing taxable income for corporation tax purposes.
Noteholders that are investment trusts, venture capital trusts, authorised unit trusts or open ended
investment companies will be subject to the same taxation treatment in respect of the Notes as other
Noteholders that are within the charge to UK corporation tax, other than with respect to profits, gains or
losses carried to or sustained by a capital reserve in the case of investment trusts and venture capital trusts,
and other than with respect to profits, gains or losses which fall to be dealt with under certain headings
for gains/losses in the statement of total return for the accounting period in respect of the Notes in the
case of authorised unit trusts and open-ended investment companies (or for those investment trusts,
venture capital trusts, authorised unit trusts or open-ended investment companies preparing accounts in
accordance with international accounting standards, profits, gains or losses specified by order made by the
Treasury). Such capital profits, gains or losses will not be brought into charge to corporation tax.
Other UK taxpayers
Taxation of chargeable gains
The Notes may not be treated by HMRC as constituting ‘‘qualifying corporate bonds’’ within the meaning
of section 117 of the Taxation of Chargeable Gains Act 1992 because there is a provision for the Notes
to be redeemed in or redenominated in euros. Therefore a disposal (including a redemption) of a Note
by a Noteholder who is resident or ordinarily resident in the UK or who carries on a trade in the UK
through a branch or agency to which the Note is attributable and who is not subject to UK corporation
tax in respect of the Note may give rise to a chargeable gain or an allowable loss for the purposes of UK
taxation of chargeable gains.
Accrued Income Scheme
The provisions of the accrued income scheme as set out in Chapter II of Part XVII of the Income and
Corporation Taxes Act 1988 may apply in relation to a transfer of the Notes by certain Noteholders who
are not subject to United Kingdom corporation tax. If such a transfer is made with accrued interest, the
scheme usually applies to deem the transferor to receive an amount of income equal to the accrued
interest. Generally, persons who: (i) are neither resident nor ordinarily resident in the United Kingdom;
and (ii) do not carry on a trade in the United Kingdom through a branch or agency to which the Notes
are attributable, will not be subject to the provisions of the scheme.
Stamp Duty and Stamp Duty Reserve Tax
No stamp duty or stamp duty reserve tax is payable on the issue of the Notes or on the transfer by delivery
of a Note.
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