Barclays, Base Prospectus 2006

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to German income tax and solidarity surcharge and a German withholding tax would fall due at a rate
of 30% (plus solidarity surcharge thereon at a rate of 5.5 per cent.).
Particular tax consequences may arise if the taxable notes can be qualified as a financial innovation
(Finanzinnovation) under German tax law. In this case, besides interest also capital gains become
subject to tax and the taxable capital gain may exceed the capital gain actually generated.
If the Notes qualify as financial innovations and are sold before maturity or are redeemed at maturity,
individuals are subject to tax with the part of sale proceeds or redemption amount which corresponds
with the attributable yield attributable to the holding period of the respective note holder reduced by the
interest, which has already been subject to income tax (plus solidarity surcharge). Is there no yield
under the Note or is the holder of the Notes not able to bring evidence concerning such yield, the
difference between the proceeds from sale, assignment or redemption and the issue or purchase price is
subject to income tax (plus solidarity surcharge) in the year of sale, assignment or maturity of the Note.
Withholding Tax
If the Notes are held in a custodial account which the note holder maintains with a German branch of a
German or non-German credit or financial services institution (the "Disbursing Agent") a 30 %
withholding tax on interest payments (Zinsabschlag), plus 5.5 per cent. solidarity surcharge on such
tax, will be levied, resulting in a total tax charge of 31.65 per cent. If the Notes qualify as financial
innovations and are kept in a custodial account which the holder of the Notes maintains with a
Disbursing Agent, such Disbursing Agent will generally withhold tax at a rate of 30 per cent. (plus 5.5
per cent. solidarity surcharge thereon) from the difference between proceeds from the redemption, sale
or assignment and the issue or purchase price of the Notes if the Notes have been kept in a custodial
account with such Disbursing Agent since the time of issuance or acquisition, respectively. lf the Note
has not been kept in a custodial account since its issuance or acquisition the 30 per cent. withholding
tax (plus 5.5 per cent. solidarity surcharge thereon) is applied to 30 per cent. of the proceeds from the
redemption, sale or assignment of the Note.
In general, no withholding tax will be levied if the holder of a Note is an individual (i) whose Note
does not form part of the property of a German trade or business, and (ii) who filed a withholding
exemption certificate (Freistellungsauftrag) with the Disbursing Agent but only to the extent the
interest income does not exceed the maximum exemption amount shown on the withholding exemption
certificate. Similarly, no withholding tax will be deducted if the holder of the Note has submitted to the
Disbursing Agent a certificate of non-assessment (Nichtveranlagungsbescheinigung) issued by the
relevant local tax office.
Withholding tax and solidarity surcharge thereon are credited as prepayments against the German
personal income tax and the solidarity surcharge liability of the tax resident. If the tax withheld exceeds
the tax liability, the difference will be refunded to a tax resident holder of Notes within the tax
assessment procedure.
(ii) Private disposals, Sec. 23 German Income Tax Act
If the Investor sells a Note within one year after acquisition of such Note, capital gains therefrom will
be subject to income tax (plus solidarity surcharge thereon). Investors holding the Notes among their
private assets will not be able to use capital losses from the sale or redemption of the Notes after a
holding period of one year to set off taxable capital gains from other assets; capital losses suffered
within the one-year-holding period may only be off-set against gains from other private disposals
within the meaning of sec. 23 German Income Tax Act.
Particular tax consequences may arise if the taxable note can be qualified as a financial innovation
(Finanzinnovation) under German tax law. In this case, besides interests also capital gains become
subject to tax and the taxable capital gain may exceed the actually received capital gain.