Coupon Payment Dates
Coupons will be paid in arrears in six equal monthly installments on
the coupon payment dates listed below. The record date for each
coupon payment date will be the date that is one business day prior
to the related coupon payment date.
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May 20, 2013
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June 18, 2013
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July 18, 2013
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August 19, 2013
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September 18, 2013
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October 21, 2013
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What are the tax consequences of the Notes?
The United States federal income tax consequences of your investment
in the Notes are uncertain. Some of these tax consequences are
summarized below, but we urge you to read the more detailed
discussion in the ''Certain U.S. Federal Income Tax Considerations''
section on page S-132 of the accompanying prospectus supplement. The
following discussion supplements the discussion in the ''Certain U.S.
Federal Income Tax Considerations'' section on page S-132 of the
accompanying prospectus supplement.
The United States federal income tax consequences of your investment
in the Notes are complex and uncertain. By purchasing a Note, you and
Barclays hereby agree (in the absence of an administrative
determination or judicial ruling to the contrary) to characterize the
Note for all tax purposes as an investment unit consisting of a
non-contingent short-term debt instrument (the "Deposit") and a put
option contract (the "Put Option") in respect of the underlying
stock. The terms of the Notes require (in the absence of an
administrative determination or judicial ruling to the contrary) that
you treat your Notes for U.S. federal income tax purposes as
consisting of two components:
Deposit component
Amounts treated as interest on the Deposit would be subject to
general rules governing interest payments on short-term notes and
would be required to be accrued by accrual-basis taxpayers (and
cash-basis taxpayers who elect to accrue interest currently) on
either the straight-line method, or, if elected, the constant yield
method, compounded daily. Cash-basis taxpayers (that do not elect to
accrue interest currently) would include interest into income upon
receipt of such interest.
Put Option component
The Put Option component would generally not be taxed until sale
or maturity. At maturity, the Put Option component either would be
taxed as a short-term capital gain if the principal is repaid in cash
or would reduce the basis of any underlying equity if you receive the
underlying equity.
With respect to coupon payments you receive, you agree to treat such
payments as consisting of interest on the Deposit and a payment with
respect to the Put Option as follows:
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Underlying Stock
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Coupon Rate per Annum
(to be set on the trade date)
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Deposit Interest
Component per Annum
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Put Option Premium
Component per Annum
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Common stock of Aruba Networks, Inc.
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8.00% to 10.60%
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%
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%
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Common stock of Yelp Inc.
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8.00% to 10.60%
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%
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%
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In the opinion of our counsel, Cadwalader, Wickersham & Taft LLP, it
would be reasonable to treat your Notes as described above. However,
in light of the uncertainty as to the United States federal income
tax treatment, it is possible that your Notes could be treated as a
single contingent short-term debt instrument, or pursuant to some
other characterization, such that the timing and character of your
income from the Notes could differ materially from the treatment
described above. Because of this uncertainty, we urge you to consult
your tax advisor as to the tax consequences of your investment in the
Notes. Please read the discussion in the ''Certain U.S. Federal
Income Tax Considerations'' section on page S-132 of the accompanying
prospectus supplement for a more detailed description of the tax
treatment of your Notes.
In addition, the Internal Revenue Service Notice 2008-2 may affect
the taxation of holders of the Notes. According to the Notice, the
Internal Revenue Service and the Treasury Department are actively
considering the appropriate tax treatment of holders of certain types
of structured notes. Legislation has also been proposed in Congress
that would require the holders of certain prepaid forward contracts
to accrue income during the term of the transaction. It is not clear
whether the Notice applies to instruments such as the Notes.
Furthermore, it is not possible to determine what guidance or
legislation will ultimately result, if any, and whether such guidance
or legislation will affect the tax treatment of the Notes. Except to
the extent otherwise required by law, Barclays intends to treat your
Notes for United States federal income tax purposes in accordance
with the treatment described above and in the ''Certain U.S. Federal
Income Tax Considerations'' section on page S-132 of the accompanying
prospectus supplement unless and until such time as some other
treatment is more appropriate.
Specified Foreign Financial Assets
Holders that are individuals (and, to the extent provided in
future regulations, entities) may be required to disclose information
about their Notes on IRS Form 8938 "Statement of Specified Foreign
Financial Assets" if the aggregate value of their Notes and their
other "specified foreign financial assets" exceeds $50,000.
Significant penalties can apply if a holder fails to disclose its
specified foreign financial assets. We urge you to consult your tax
advisor with respect to this and other reporting obligations with
respect to your Notes.
3.8% Medicare Tax On "Net Investment Income"
U.S. holders that are individuals, estates, and certain trusts are
subject to an additional 3.8% tax on all or a portion of their "net
investment income," which may include the interest payments and any
gain realized with respect to the Notes, to the extent that their net
investment income, when added to their other modified adjusted gross
income, exceeds $200,000 for an unmarried individual, $250,000 for a
married taxpayer filing a joint return (or a surviving spouse), or
$125,000 for a married individual filing a separate return. U.S.
holders should consult their advisors with respect to the 3.8%
Medicare tax.