RBS 2008 Annual Report Download - page 296

295RBS Group Annual Report and Accounts 2008
PROs beneficially owned by an individual, whose domicile is
determined to be the United States for the purposes of the Estate Tax
Treaty and who is not a national of the UK, will not be subject to UK
inheritance tax on the individual’s death or on a lifetime transfer of the
PRO, except in certain cases where the PRO (i) is comprised in a
settlement (unless, at the time of the settlement, the settlor was
domiciled in the United States and was not a national of the UK); (ii) is
part of the business property of a UK permanent establishment of an
enterprise; or (iii) pertains to a UK fixed base of an individual used for
the performance of independent personal services. The Estate Tax
Treaty generally provides a credit against US federal estate or gift tax
liability for the amount of any tax paid in the UK in a case where the PRO
is subject to both UK inheritance tax and US federal estate or gift tax.
Stamp duty and SDRT
No stamp duty, SDRT or similar tax is imposed in the UK on the issue,
transfer or redemption of the PROs.
Passive Foreign Investment Company considerations
A foreign corporation will be a PFIC in any taxable year in which, after
taking into account the income and assets of the corporation and
certain subsidiaries pursuant to applicable ‘look-through rules’, either (i)
at least 75% of its gross income is ‘passive income’ or (ii) at least 50%
of the average value of its assets is attributable to assets which
produce passive income or are held for the production of passive
income. The company does not believe that it was as a PFIC for its 2008
taxable year. Although interest income is generally passive income, a
special rule allows banks to treat their banking business income as non-
passive. To qualify for this rule, a bank must satisfy certain requirements
regarding its licensing and activities. The company believes that it
currently meets these requirements. The company’s possible status as a
PFIC must be determined annually, however, and may be subject to
change if the company fails to qualify under this special rule for any
year in which a US Holder holds ordinary shares, non-cumulative dollar
preference shares, ordinary ADSs, preference ADSs or PROs. If the
company were to be treated as a PFIC in any year during which a US
Holder holds ordinary shares, non-cumulative dollar preference shares,
ordinary ADSs, preference ADSs or PROs, US Holders would generally
be subject to adverse US federal income tax consequences. Holders
should consult their own tax advisers as to the potential application of
the PFIC rules to the ownership and disposition of the company’s
ordinary shares, non-cumulative dollar preference shares, ordinary
ADSs, preference ADSs or PROs.
Exchange controls
The company has been advised that there are currently no UK laws,
decrees or regulations which would prevent the import or export of
capital, including the availability of cash or cash equivalents for use by
the Group, or the remittance of dividends, interest or other payments to
non-UK resident holders of the company’s securities.
There are no restrictions under the Articles of Association of the
company or under UK law, as currently in effect, which limit the right of
non-UK resident owners to hold or, when entitled to vote, freely to vote
the company’s securities.
Memorandum and Articles of Association
The company’s Memorandum of Association and Articles of Association
as in effect at the date of this annual report are registered with the
Registrar of Companies of Scotland. The Articles of Association were
last amended on 23 April 2008 and have been filed with the SEC.
For a description of certain provisions of the company’s Memorandum
and Articles, see the ‘Additional Information – Memorandum and Articles
of Association’ section of the company’s Annual Report on Form 20-F
for the fiscal year ended 31 December 2007.
Incorporation and registration
The company was incorporated and registered in Scotland under the
Companies Act 1948 as a limited company on 25 March 1968 under the
name National and Commercial Banking Group Limited. On 10 March
1982, it changed its name to its present name and was registered under
the Companies Acts 1948 to 1980 as a public company with limited
liability. The company is registered under Company No. SC 45551.
Code of ethics
As discussed on page 149, the Group has adopted a code of conduct
applicable to all Group employees, which will be provided to any person
without charge, upon request, by contacting Group Secretariat at the
telephone number listed on page 296.