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European Union Savings Tax Directive
Information for all EU Residents (including the UK)

This communication outlines the changes being implemented, by the Government of Guernsey, on 1 January 2011, to the EU Savings Tax Directive (?The Directive").

With effect from 1 January 2011:

Automatic Exchange of Information

If you are resident in the EU (including the UK) gross interest will be paid to you and be subject to an automatic exchange of information with The Guernsey Income Tax Authority.  This report will detail your full name, postal address, account number/s,  date of birth, place of birth, tax identification number (if known) and the amount of interest added to your account/s.  Thereafter this will be forwarded to the tax authorities in your country of residence.

If you are deemed to be "non-domiciled" for tax purposes in your country of residence, we may be able to pay you gross interest without the need to submit an exchange of information report.  To arrange this we require confirmation of your tax status, e.g.  a letter issued by the tax authorities in your country of residence or accountants.

Non EU residents will continue to receive gross interest and it remains the responsibility of individual investors to disclose the interest earned on their accounts to the relevant tax authorities.

The Directive was implemented on 1 July 2005 and, in line with other jurisdictions, the Government of Guernsey introduced measures equivalent to the Directive, as detailed below:

Up to 31 December 2010:

Retention Tax Option

For EU resident tax payers interest will be paid, by default, net of the following applicable amount of tax:

For interest paid from 1 July 2005 - 30 June 2008	15%
For interest paid from 1 July 2008 - 31 December 2010	20%

Tax deducted will be paid as a lump sum to the Guernsey Tax Authority who, in turn, will make a payment to the appropriate tax authority in the various EU countries.  These sums are not attributable to individuals.  It should be noted that this may not fully discharge the liability on interest earned, if an account holders? taxable rate was in excess of the rates quoted above.  If this is the case then tax payers may be liable for the difference.

The Directive provides for the tax authority in the EU State in which account holders are resident to grant some form of tax credit in respect of the tax withheld, depending on their circumstances, such persons may request a tax certificate from us.

Exchange of Information option

Under The Directive EU resident tax payers can elect to receive gross interest and Skipton International Limited will make a disclosure to the tax authority in the account holders? country of residence via The Guernsey Income Tax Authority.

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