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General guidance to individuals who are UK-resident shareholders in Barclays PLC.

The following information is intended to provide general guidance to individuals who are UK-resident shareholders in Barclays PLC, and does not constitute professional advice. Shareholders, particularly those who are not resident in the UK, should take advice from their professional adviser if in doubt as to their personal tax position.

Taxation of dividend income from 6 April 2016

From 6 April 2016 the dividend tax credit was abolished. Instead, investors have a tax free dividend income allowance of £5,000. Dividend income above the tax free allowance is subject to tax at 7.5% for basic rate taxpayers, 32.5% for higher rate tax payers and 38.1% for additional rate taxpayers. You are responsible for declaring any taxable dividend income on your self assessment tax return. To understand how you may be affected by the changes and for further information visit the HMRC website:

www.gov.uk/tax-on-dividends/how-dividends-are-taxed

Taxation of dividend income up to 5 April 2016

For the tax years ending 5 April 2015 and 5 April 2016, dividends from Barclays PLC carry a notional tax credit equal to one-ninth of the cash sum paid.

Shareholders who pay tax at the basic rate (20 per cent) will have no further liability to tax.

Non-taxpayers will be unable to make a claim for repayment of the notional tax credit.

The position of higher rate taxpayers is as follows (using a cash dividend of £90 as an example)

  £
Cash dividend
£90.00
Tax credit
£10.00
Income
£100.00
Higher rate tax * £(32.50)
After-tax income £67.50

* The higher rate itself is 40% but a special rate of 32.5% applies to higher rate taxpayers in respect of income from UK dividends. In this example, tax payable under self assessment is £22.50 (made up of £32.50 less the tax credit of £10.00).

NOTE: The additional rate of income tax is 45% for the tax years ending 5 April 2015 and 5 April 2016, applying to individuals with taxable income over £150,000. However, a special rate of 37.5% applies to additional rate taxpayers for income from UK dividends. Therefore, in the example above, the tax payable under self assessment is £27.50 (made up of £37.50 less the tax credit of £10). 

Shareholders whose dividends are paid directly to a bank or building society account will receive, in mid-March each year, a single tax voucher relating to all dividends paid in the year. The tax voucher should be kept safely as it will help when completing tax returns.

Capital Gains Tax

Capital Gains Tax (CGT) may be payable by individuals on gains made from the disposal of Barclays shares.

Each individual has an annual (non-cumulative) exemption, which for the tax years ending 5 April 2015 and 5 April 2016 is £11,000 and £11,100 respectively of chargeable gains. Where payable, CGT is levied at a rate of 18% for basic rate taxpayers, and 28% for higher and additional rate taxpayers.

Please note that with effect from 6 April 2016 the government will reduce the rate of CGT from 18% to 10% for basic rate taxpayers, and from 28% to 20% for higher and additional rate taxpayers.

Example calculation for Capital Gains Tax

Mr Smith bought 1,000 shares in November 1991 at a cost (including dealing costs) of £3,575. He sells the shares in January 2015 and realises (after dealing costs) £21,500. He owned no other shares in the period.

  2015/2016
Calculation £
Net Proceeds 21,500
Deduct Cost (3,575)
Gain 17,925
Annual Exemption (11,100)
Chargeable gain 6,825


Capital Gains Tax can be complex, particularly where shareholdings are built up over a period of time, where part disposals out of existing shareholdings are made or rights issues have taken place. Shareholders should take professional advice in these circumstances.

Details on tax issues may affect shareholders. This information should not replace professional advice. 

Rights Issue 2013 - IRS Form 8937 (amended November, 15th 2013)

IRS Form 8937 – “Report of Organizational Actions Affecting Basis of Securities” is being made available by Barclays PLC following the 2013 rights issue pursuant to U.S. Internal Revenue Code section 6045B which requires issuers to report certain organizational actions that affect the U.S. tax basis of securities in the hands of shareholders and additional information about the effect on basis.

Download IRS Form 8937 (PDF, 500KB)Download IRS Form 8937 (PDF 500KB, new window)

*IRS Circular 230 Disclosure: BCI and its affiliates do not provide tax advice. Please note that (i) any discussion of US tax matters contained in this communication (including any attachments) cannot be used by you for the purpose of avoiding tax penalties; (ii) this communication was written to support the promotion or marketing of the matters addressed herein; and (iii) you should seek advice based on your particular circumstances from an independent tax advisor.

Neither Barclays in the U.S. nor its Wealth and Investment Management employees in the U.S. render tax or legal advice. Please consult with your accountant, tax advisor, and/or attorney for advice concerning your particular circumstances.  

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