Bermuda Stock Exchange Gains Recognised Status From UK Tax Department

by Amanda Banks, Tax-News.com, London

14 December 2007

The Bermuda Stock Exchange (BSX) is pleased to announce that with effect from 4 December 2007, the United Kingdom’s HM Revenue and Customs has designated the Bermuda Stock Exchange as a “recognised stock exchange” under UK tax law.

The designation extends to the entire Bermuda Stock Exchange, and as such, securities listed will meet the HMRC interpretation of “listed” as set out in the Income Act 2007, as amended by Schedule 26 to the Finance Act 2007.

With effect from 4 December 2007 the Bermuda Stock Exchange is also regarded as a recognised stock exchange for Inheritance Tax purposes.

Designation by the UK’s Revenue and Customs is being seen by the BSX as a significant development that expands the services provided by an offshore stock exchange to unprecedented levels.

BSX Chairman David Brown stated: “The BSX embarked on a path in the 1990’s to create a fully operational, modern stock exchange platform in the offshore region which is well regulated and globally recognised. Today’s announcement is further evidence of the BSX commitment to fulfil this goal.”

He went on to note: “Designation not only required due diligence and detailed analysis of the BSX by HM Revenue and Customs during the application process, but also the involvement and support of Bermuda’s Minister of Finance, her Financial Secretary and the Ministry for which the Council and staff of the BSX is grateful. I must also congratulate the BSX team who have diligently and professionally pursued this important designation for several years.”

Greg Wojciechowski, President & Chief Executive Officer added: “The BSX is delighted to have achieved and been granted this very important designation by HM Revenue and Customs. BSX clients have asked for the Exchange to seek this designation as they have indicated an interest in having their investment universe of “qualifying investments” expanded or in other instances to have an alternative to the current listing venues for the listing of their Eurobond or debt products. We are proud to have been able to deliver on both counts and look forward to further growing the international business of the Exchange.”

The term "recognised stock exchange" occurs throughout the UK Tax Acts and in various tax regulations. For example, it is used in connection with close companies in section 415 (1) (b) Income and Corporation Taxes Act 1988, and in the definition of investments which may be held in PEPs and ISAs.

Recognition under section 1005 of the Income Tax Act 2007 is for tax purposes only, and confers no other status on the exchange concerned; it does not constitute any form of recognition or approval for regulatory or other purposes, nor does it provide any form of approval or recommendation of any of the investments which are listed or traded on that exchange.

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