Post on 17-Feb-2019
0001193125-11-103942.txt : 201104210001193125-11-103942.hdr.sgml : 2011042120110420181122ACCESSION NUMBER:0001193125-11-103942CONFORMED SUBMISSION TYPE:FWPPUBLIC DOCUMENT COUNT:3FILED AS OF DATE:20110421DATE AS OF CHANGE:20110420
SUBJECT COMPANY:
COMPANY DATA:COMPANY CONFORMED NAME:BARCLAYS BANK PLC /ENG/CENTRAL INDEX KEY:0000312070STANDARD INDUSTRIAL CLASSIFICATION:COMMERCIAL BANKS, NEC [6029]IRS NUMBER:000000000STATE OF INCORPORATION:X0FISCAL YEAR END:1231
FILING VALUES:FORM TYPE:FWPSEC ACT:1934 ActSEC FILE NUMBER:333-169119FILM NUMBER:11771633
BUSINESS ADDRESS:STREET 1:1 CHURCHILL PLACESTREET 2:E14 5HPCITY:LONDON ENGLANDSTATE:X0ZIP:E14 5HPBUSINESS PHONE:2124124000
MAIL ADDRESS:STREET 1:1 CHURCHILL PLACESTREET 2:E14 5HPCITY:LONDON ENGLANDSTATE:X0ZIP:E14 5HP
FORMER COMPANY:FORMER CONFORMED NAME:BARCLAYS BANK INTERNATIONAL LTDDATE OF NAME CHANGE:19850313
FILED BY:
COMPANY DATA:COMPANY CONFORMED NAME:BARCLAYS BANK PLC /ENG/CENTRAL INDEX KEY:0000312070STANDARD INDUSTRIAL CLASSIFICATION:COMMERCIAL BANKS, NEC [6029]IRS NUMBER:000000000STATE OF INCORPORATION:X0FISCAL YEAR END:1231
FILING VALUES:FORM TYPE:FWP
BUSINESS ADDRESS:STREET 1:1 CHURCHILL PLACESTREET 2:E14 5HPCITY:LONDON ENGLANDSTATE:X0ZIP:E14 5HPBUSINESS PHONE:2124124000
MAIL ADDRESS:STREET 1:1 CHURCHILL PLACESTREET 2:E14 5HPCITY:LONDON ENGLANDSTATE:X0ZIP:E14 5HP
FORMER COMPANY:FORMER CONFORMED NAME:BARCLAYS BANK INTERNATIONAL LTDDATE OF NAME CHANGE:19850313
FWP1dfwp.htmFREE WRITING PROSPECTUS IPATH TAX FAQS
Free Writing Prospectus iPath Tax FAQs
Free Writing Prospectus
Filed Pursuant to Rule 433
Registration No.333-169119
April20, 2011
ipath
u.s. federal income tax considerations
iPathExchange Traded Notes
for a more complete discussion of the primary tax treatment and
alternative tax characterizations that are possible with respect to
each iPath ETN.
What makes iPath ETNs an attractive investment
option?
Unlike mutual funds that may be required to make taxable
distributions to shareholders, the iPath ETNs currently available
will not make taxable distributions. Therefore, holders of iPath
ETNs (other than the single currency ETNs) should, assuming
they are treated as described earlier, generally not be required to
include amounts in income prior to sale, redemption or maturity.
This enables investors to control the timing of taxable events
related to their investment in iPath ETNs. However, the IRS and
U.S. Treasury are actively considering the tax treatment of
instruments
such as iPath ETNs, which couldchange.
Is there an IRS or court ruling that governs the U.S. tax
treatment of iPath ETNs?
Yes, for iPath single currency ETNs only.
What isthe ruling on the U.S. tax treatment of iPath single
currency ETNs?
Revenue ruling 2008-1, issued on December7, 2007, holds that
certain financial instruments linked directly to the value of a
foreign currencyregardless of whether the instrument is
privately offered, publicly offered or traded on an exchange
should be treated like debt for federal tax purposes.
Revenue
Ruling 2008-1 extends to iPath single currency ETNs.
What is Barclays reaction to the ruling on the U.S. tax
treatment of iPath single currency ETNs?
Theruling provides investors clarity on the tax treatment
of certain financial instruments linked directly to thevalue of
a foreign
currencyregardless of whether the instrument is
privately
offered, publicly offered or traded onan exchange.
How are iPath ETNs treated for U.S. federal
income tax purposes?
Barclays and investors agree to treat all iPath ETNs, except
single currency ETNs, for all U.S. federal income tax purposes,
as prepaid executory contracts with respect to the relevant
index. If such iPath ETNs are so treated, investors should
recognize gain or loss upon the sale, redemption or maturity of
their iPath ETNs as the amount equal to the difference
between
the amount they receive at such time andtheir tax basis in the
securities. Investors generally agree to treat such gain or loss as
capital gain or loss, except with respect to iPath currency ETNs,
for which investors agree to treat such gain or loss as ordinary,
as detailed in the chart below.
The following table summarizes certain U.S. federal tax
consequences that holders of iPath ETNs and Barclays agree
to be subject to by purchasing an iPath ETN. These tax
consequences,
however, are not certain andalternative
treatments
are possible. Please see the applicable prospectus
iPath Exchange Traded Notes (ETN s) provide investors with cost-effective exposure to asset classes
that have not always been easy to access. Here are answers to questions financial professionals and
individuals commonly ask about the tax treatment of the iPath ETNs currently available.
TYPE
TREATMENT
AT MATURITY
RECOGNITION OF
CURRENT INCOME
Alternatives Capital Gains No
Buy-Write Capital Gains No
Commodities Capital Gains No
Equity Capital GainsNo
Fixed Income Capital Gains No
Leveraged Capital Gains No
Currency
Carry Trade Ordinary Income No
Single Currency Ordinary Income Yes
Thisinformation should not be considered tax advice. Investors are urged to consult their tax advisor with regard to their specific situation.
What is the current tax status of equity, fixed income,
leveraged, commodity and certain alternatives ETNs?
The revenue ruling does not apply to iPath ETNs other than iPath
single currency ETNs. On December7, 2007, the IRS also issued
notice 2008-2 asking for comments on the appropriate tax
treatment of instruments such as the equity and commodity
ETNs. The IRS has not issued additional guidance on this issue.
What is Barclays position about the tax status of
equity, fixed income, leveraged, commodity and certain
alternatives ETNs?
Barclays is aligned with the Securities Industry and Financial
Markets Association (SIFMA). We believe that the tax treatment
of an investment product should be driven by the products
attributes.
Mutual funds and ETNs are taxeddifferently because
they are fundamentally different products. Investors who buy
shares in a mutual fund own the underlying securities and receive
dividend income from those securities annually, which is taxable.
ETN investors
do not own underlying securities and receive no
dividends
while holding the ETN.
What is the tax treatmentof iPath ETNs in the event of an
issuer redemption (applicable to certain iPath ETNs)?
Investors should generally recognize capital gain or loss upon the
sale, early redemption or maturity of their ETNs in an amount
equal to the difference between the amount they receive at such
time and their tax basis in the ETNs.
What does it mean for iPath single
currency ETNinvestors?
This means that any interest accrued (net of fees) during the life
of the note is taxable to investors, even though the interest is
reinvested and not paid out until the holder sells the ETN or the
note matures. It also means that a gain or loss from the sale or
redemption of the notes will be ordinary and investors will not
be able to elect capital gains treatment.
Do iPath single currency ETN investors need to submit
a form to the IRS requesting a certain tax treatment?
No, it is not necessary to elect any specific treatment since the
IRS has ruled how financial instruments linked directly to the value
of a foreign currency should be treated from a tax perspective.
Most custodians will provide Form 1099 OID for annual tax
reporting purposes.
What are the benefits ofinvesting in iPath single
currency ETNs?
Institutional and individual investors increasingly recognize
that currency
exposure may constitute a separate asset class
toprovide portfolio diversification and add potential portfolio
returns. The iPath single currency ETNs providesimple,
transparent and cost-effective access to three significant
exchange rates. In addition, because they make no distributions,
holders benefit from daily compounding.
An investment in iPath ETNs involves risks, including possible
loss of principal. If specified in the relevant prospectus, Barclays
Bank PLC as issuer may redeem a series of Securities (in whole
but not in part) at its sole discretion on any trading day on or
after the inception date until and including maturity. See the
relevant prospectus for more information regarding the risks
associated with Barclays Bank PLCs right to redeem the
Securities. For a description of the main risks see Risk Factors
in the applicable prospectus.
Barclays Bank PLChas filed a registration statement (including a
prospectus) with the SEC for the offering to which this
communication relates. Before you invest, you should read the
prospectus and other documents Barclays Bank PLC has filed with
the SEC for more complete information about the issuer and this
offering. You may get these documents for free by visiting
www.iPathETN.com or EDGAR on the SEC website at www.sec.gov.
Alternatively, Barclays Bank PLC will arrange for Barclays Capital
Inc. to send you the prospectus if you request it by calling toll-free
1-877-764-7284, or you may request a copy from any other dealer
participating in the offering.
BlackRock Fund Distribution Company assists in the promotion of the
iPath ETNs.
iPath ETNs (theSecurities) are unsecured obligations of Barclays Bank
PLC and are not secured debt. TheSecurities are riskier than ordinary
unsecured debt securities and have no principal protection. Risks of
investing in the Securities include limited portfolio diversification, trade price
fluctuations, uncertain principal repayment and illiquidity. Investing in the
Securities is not equivalent to investing directly in an index or in any particular
index components. The investor fee will reduce the amount of your return at
maturity or on redemption, and as a result you may receive less than the
principal amount of your investment at maturity or upon redemption of your
Securities even if the level of the relevant index has increased or decreased (as
may be applicable to the particular series of Securities). An investment in iPath
ETNs may not be suitable for all investors.
The Securities may be sold throughout the day on the exchange through any
brokerage account. There are restrictions on the minimum number of
Securities you may redeem directly with the issuer as specified in the
applicable prospectus. Commissions may apply and there are tax consequences
in the event of sale, redemption or maturity of Securities. Sales in the
secondary market may result in significant losses.
iPath ETNs typically have lower investor fees than currently existing mutual
funds that invest in similar markets and are available to retail investors. Buying
and selling iPath ETNs will result in brokerage commissions.
Barclays Capital Inc. and its affiliates and BlackRock Fund Distribution
Company and its affiliates do not provide tax advice and nothing contained
herein should be construed to be tax advice. Please be advised that any
discussion of U.S. tax matters contained herein (including any attachments)
(i) is not intended or written to be used, and cannot be used, by you for the
purpose of avoiding U.S. tax-related penalties; and (ii)was written to support
the promotion or marketing of the transactions or other matters addressed
herein. Accordingly, you should seek advice based on your particular
circumstances from an independent tax advisor.
2011 Barclays Bank PLC. All rights reserved. iPath, iPath ETNs and the iPath
logo are registered trademarks of Barclays Bank PLC. All other trademarks,
servicemarks or registered trademarks are the property, and used with the
permission, of their respective owners. 598-63TP-4/11
Not FDIC Insured No Bank Guarantee May Lose Value
iPath federal income tax considerations
iP-0349-0411
Find Your iPath 18777647284 www.iPathETN.com
Ipath barclays
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