Investor Profile. UK Pension Fund

Investor Profile UK Pension Fund 2017

Disclaimer The information provided in this publication is for general information purposes only and is valid as at January 1, 2017. Any changes to legislation or treaties will be published via the RBC Investor & Treasury Services Tax Newsflash procedure and subsequent editions of this publication will be updated accordingly. The information in this publication should not be regarded as advice. RBC Investor & Treasury Services are not responsible for the accuracy of the information, or for any actions taken based on the information. We strongly recommend consultation with appropriate tax advisors. RBC Investor & Treasury Services is a global brand name and is part of Royal Bank of Canada. RBC Investor & Treasury Services is a specialist provider of asset servicing, custody, payments and treasury services for financial and other institutional investors worldwide. RBC Investor Services operates through two primary operating companies, RBC Investor Services Trust and RBC Investor Services Bank S.A., and their branches and affiliates. In the UK, RBC Investor Services Trust operates through a branch authorized by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The Dubai Branch of RBC Investor Services Trust is regulated by the Dubai Financial Services Authority. In Australia, RBC Investor Services Trust is authorized to carry on financial services business by the Australian Securities and Investments Commission under the AFSL (Australian Financial Services Licence) number 295018. In Singapore, RBC Investor Services Trust Singapore Limited (RISTS) is licensed by the Monetary Authority of Singapore (MAS) as a Licensed Trust Company under the Trust Companies Act and was approved by the MAS to act as a trustee of collective investment schemes authorized under S 286 of the Securities and Futures Act (SFA). RISTS is also a Capital Markets Services Licence Holder issued by the MAS under the SFA in connection with its activities of acting as a custodian. In Hong Kong, RBC Investor Services Bank S.A. is a restricted license bank and is authorized to carry on certain banking business in Hong Kong by the Hong Kong Monetary Authority. RBC Investor Services Trust Hong Kong Limited is regulated by the Mandatory Provident Fund Schemes Authority as an approved trustee. / Trademarks of Royal Bank of Canada. Used under licence. i I N V E S T O R P R O F I L E

Contents Overview of RBC Investor & Treasury Services withholding tax policies 3 Markets 7 Additional comments: 19 rbcits.com

This document provides an outline of the relevant withholding taxes applicable to pension funds resident in the United Kingdom, in respect of securities income from portfolio investments. This Investor Profile is intended for use by UK resident pension funds investing in cross border securities only.

Overview of RBC Investor & Treasury Services withholding tax policies 1. ACCOUNT OPENING / NEW PORTFOLIO INVESTMENT Information / documentation required from the client When a client opens a Global Custody account for the first time, the appropriate Tax Questionnaire and relevant documents including self-certification form for regulatory reporting purposes, as provided in the account opening package must be completed providing full details of the beneficial owner of any income received for the account. Where a Tax Questionnaire is not completed the Bank will not supply any tax services for that account and full withholding tax rates will be applied. When a client initially opens a global custody account a detailed list of investment markets is requested. This list provides the necessary information for the Bank to complete tax documentation or request additional client documentation to ensure the appropriate tax rate is obtained in each market. If, at a later date, the client s investment strategy requires the opening of a global custody account in a new market, current procedures provides for a weekly report to be produced detailing the new market. At this stage the bank will, as part of its client monitoring service, complete or request any necessary tax documentation. If no such advice or requested documentation is received the Bank will not accept any liability for any tax losses incurred. Furthermore, it is the responsibility of the client to advise the Bank of any changes that may lead to a reclassification of client type for the beneficial owner of the account or other details relating to their tax status, such as a change in Local Tax Office or Tax Identification Number. Any changes must be advised to the Bank within 10 business days. (Please refer to the Taxation SLS for full details of clients responsibilities and the service that can be expected from RBC Investor & Treasury Services). General Requirements Power of Attorney As a part of the account opening package (Tax Questionnaire) the Bank requires the completion of a Power of Attorney from the beneficial owner (or where appropriate the Trustees of a fund). This POA enables the Bank to complete many of the required documents in-house without further recourse to the client. Market specific requirements are detailed below and markets where the Bank can complete documentation on behalf of the beneficial owner where a POA is held are clearly marked. Note that due to market conditions clients requiring relief at source or reclaim services on Italian securities (including Italian Government Bonds held in a depositary such as Euroclear) must provide the Bank with a further two Notarized Powers of Attorney. Certain markets or scenarios exist where it is not possible for the Bank to complete the required documentation on behalf of the beneficial owner, even under POA, and in these cases it will be the client s responsibility to provide the necessary documents on request. The most important of these markets is the US where completion of a W-8seriesform is a necessity. In addition, in certain cases a client may not wish to provide RBC Investor & Treasury Services with a Power of Attorney. In such cases it may be arranged for clients to complete any additional specific documentation required themselves.

Certification of Residency In order to obtain Double Taxation Treaty benefits in a number of foreign markets, the United Kingdom Tax Office is required to issue certificates of residence or certify tax reclaim forms. In order to facilitate the issuance of certificates of residence and the certification of tax reclaim forms, for each United Kingdom resident client the Bank will require the beneficial owner to provide to it a Tax Office Authority document. This document enables the Bank to liaise directly with the company s tax office in order to obtain appropriate United Kingdom residence certifications for tax relief claims. Please note that without this document no tax service can be offered to clients. Country Specific Requirements Australian Declaration The Australian Declaration enables RBC Investor & Treasury Services to file a request for a private ruling from the Australian Tax Office (ATO) on behalf of qualifying funds. The ATO will then issue a written private ruling which, if the exemption is approved, will state that the applicant is exempt from Australian withholding tax on Australian dividends and interest payments. In most cases the private ruling is valid for a maximum of five years. In order to satisfy the requirements of the Australian Tax Office, the declaration must also be accompanied by the following documents (which should be returned together with the completed Tax Questionnaire): A copy of a favourable determination letter (certification, advice or letter) issued to the Pension Fund within the last three years by its tax office, confirming the Pension Fund s tax exempt status (and citing the section of the law under which the fund is exempt in its country of residence) A copy of the trust deed for the fund, or other founding documents that establish the fund, including a copy of the fund rules, showing how it operates and with details of the superannuation benefits and entitlements provided An extract / copies from the Pension Fund s annual accounts/financial reports that cover the last two years If available, a copy of any publication, brochure or pamphlet issued to fund members which explain the fund and benefits available The Australian Tax Office may require certain pension funds established in countries that do not have similar tax regimes to Australia to provide further details. US Form W8-BEN/E This document alleviates the charge to US backup tax on US source income payments and gross sale proceeds received by RBC Investor & Treasury Services across all countries of investment. For corporates invested in US bonds, it also enables "portfolio interest" to be paid without deduction of US Non Resident Withholding Tax. 2. CROSS BORDER CUSTODY AND SETTLEMENT TAX RECLAIMS Restrictions are placed on providing a withholding tax reclaim or relief at source service on cross border holdings. A cross border security is any security settled and held by an agent in a country not being the home country of location of that security. Due to inherent risks such as an inability to process cross border reclaims by the sub agent holding the security and substantial agent fees where cross border reclaims are available. This policy is extended to equity investments held through Euroclear but excludes ADR s.

3. GLOBAL MINIMUM TAX RECLAIM THRESHOLD A minimum reclaim value is set for all withholding tax reclaim territories. All reclaims with a value falling under the minimum threshold for that market will not be processed by RBC Investor & Treasury Services. Such claims will be deleted from any accruals reported to clients. This is due to the fact that it is uneconomic, based on agent charges and internal processing costs for RBC Investor & Treasury Services to process reclaims under a certain value. 4. ITALIAN BONDS HELD IN EUROCLEAR An exemption from withholding tax exists for Italian bonds for eligible investors. Operationally the process for exempting bonds for clients who bulk trade across accounts is not available if the bonds are held in the Euroclear depositary. These clients must hold their Italian Bonds in the Domestic Market if they wish to achieve exemption. However, any beneficial owner that operates a segregated account on Milvus and trades separately for that account will be offered a relief at source service in Euroclear, if required, from the date of receipt of the appropriate tax documentation required to exempt the account from Italian withholding tax.

Markets Country Dividends standard Dividends treaty Corporate bonds standard Government bonds standard Interest treaty Notes Argentina 0 15 0/15.05/35 0 12 Dividends: If the dividend distribution exceeds the after tax accumulated taxable income of the payer a withholding of 35% may be imposed on the income Australia 2 (Domestic Exemption at Source 30/0* 30% rate for unfranked dividends, 0% rate for fully franked dividends * An exemption is available on income paid to tax exempt entities having been approved as such by the Australian Tax Office 15 0 0 10 Documentation required Interest: Interest derived by non-residents from Argentinean government and corporate bonds is exempt from withholding tax. A 15.05% rate applies to interest (other than bond interest) derived by non-resident financial institutions which conform to the Basle standards for banks. Otherwise, the domestic rate of withholding tax on interest derived by non-resident companies is 35%. Domestic Exemption at Source: Australian Declaration 1. A copy of a favourable determination letter issued to the Pension Fund by its tax office, confirming the Pension Fund s tax exempt status 2. A copy of the trust deed for the fund, or other founding documents that establish the fund, including a copy of the fund rules, showing how it operates and with details of the superannuation benefits and entitlements provided 3. An extract / copies from the Pension Fund s annual accounts/financial reports that cover the last two years 4. If available, a copy of any publication, brochure or pamphlet issued to fund client and process/ action to be: Domestic Exemption at Source: Clients are initially assigned to a general account to which the treaty withholding tax rate is assigned If the Australian Tax Office issues a private ruling approving the exemption RBC Investor & Treasury Services will re-assign the account to the exempt location

Austria (Reclaim members which explain the fund and benefits available 27.5 0 (27.5) 0 0 0 Documentation required client and process/ action to be: Tax reclaim application Sent to client s tax office for certification of residency. Submitted to agent bank in Austria Bangladesh 30 15 20 20 10/7.5 Interest: Under UK treaty 7.5% rate applies to interest derived by financial institution or insurance company. Belgium (Domestic Exemption at Source/Reclaim Brazil (Non- Treaty 30/15*/0** *15% rate applies to certain shares issued on or after 1 January, 1994 and shares of investment companies (SICAV's, SICAF's and OPCC's) **An exemption is available for foreign Pension Funds 0 (30) *An exemption is available for foreign Pension Funds 30/0* *An exemption is available for foreign Pension Funds 0 15/0 Documentation required Reclaim: Domestic Exemption at Source: None required client and process/ action to be: Reclaim: Tax reclaim application Sent to client s tax office for certification of residency A Form C is prepared and submitted to the agent Domestic Exemption at Source: Clients are assigned to the exempt security location Submitted to agent bank in Belgium 0 n/a 15 0 n/a Interest: Interest arising in a Contracting State and paid to the Government of the other Contracting State, a political subdivision thereof or any agency (including a financial institution) wholly owned by that Government or political subdivision shall be exempt from tax.

Canada 1 (Relief at Source 25 0 0* *There is no withholding tax deducted on interest income earned by nonresidents effective 01.01.08 0 10/0* *Where the standard rate is lower than the treaty rate, the standard rate applies Documentation required 1. A letter on the underlying pension plan s letterhead declaring that it fully qualifies for the exemption on dividends under paragraphs 3 and 4 of Article 10 of the amended Canada-UK tax treaty and undertaking to promptly provide notification if it ceases to qualify on any investment held in its account, and 2. A letter or (copy of the certificate) issued by HMRC or other relevant UK regulatory authority confirming that the pension scheme is registered under Part 4 of the Finance Act 2004. client and process/ action to be: None required Chile 35 15 35/4 35/4 15 Dividends: The statutory withholding tax rate on dividends is 35%, less a tax credit which varies according to the rate of corporate tax paid by the issuing company. China 0/10 10 10 10 10 Dividends: Chinese H and B shares are subject to WHT at 10% Colombia (Non-Treaty 0/25 n/a 14 14 n/a Dividends: 0% withholding tax rate applies to dividends paid out of taxed profits. If profits are untaxed, dividends are subject to a rate of 25%. Effective 1 January 2018, an additional 5% withholding tax will apply to dividends from results obtained in 2017 regardless of whether the dividends are paid out of profits that have been taxed. Czech Republic (Reclaim Denmark (Reclaim 35 15 (20) 35 35 0 Documentation required 2. Full beneficiary details provided 27 15 (12) 0 0 0 Documentation required 1. Tax Office Authority 2. Full beneficiary details provided client and process/ action to be: Declaration of Beneficial ownership Certificate of Residence client and process/ action to be:

Tax reclaim application Sent to client s tax office for certification of residency Submitted to agent bank in Denmark Estonia 0 15 0 0 10 Finland 1 (Relief at Source/ Reclaim Territory ) France 1 (Reclaim/ Relief at Source 30 0 (30) 0 0 0 Documentation required Relief at Source: Beneficial owner details (one off requirement per Tax Questionnaire, information update required should details change) Reclaim: 30 0 (30) 0 0 0 Documentation required Relief at Source: Beneficial owner details (one off requirement per Tax Questionnaire, information update required should details change) Reclaim: client and process/ action to be: Relief at Source: Beneficial owner breakdown to be provided prior to each dividend payment Reclaim: Tax reclaim application Sent to client s tax office for certification of residency Submitted to agent bank in Finland client and process/ action to be: Relief at Source: Beneficial owner breakdown to be provided prior to each dividend payment Reclaim: Tax reclaim application Sent to client s tax office for certification of residency Submitted to agent bank in France

Germany (Reclaim Greece (Reclaim 26.375 10 (16.375) 0 0 0 Documentation required 15 15 0 0 0 Tax reclaim application including shareholder percentage information sent to client s tax office for certification of residency Submitted to agent bank in Germany Hong Kong 0 15/0 0 0 10/0 Hungary 0 15 30/0 0 0 India 0 15 20 20 15 Interest: 20% rate applies to interest from foreign currency loans, corporate and government bonds.. The taxation of interest is complex and investors should consult their tax advisors for further information before investing in the Indian market. Indonesia 20 15 20 20 10 In order to get treaty relief specific forms have to be completed within very tight deadlines The treaty relief Forms require endorsement by the tax authorities in the relevant entity s own jurisdiction. These include a number of items on which tax authorities may not have sufficient information to appropriately endorse, such as the following: The entity / transaction structure is not motivated by tax avoidance The entity is independently managed The entity employs sufficient qualified personnel The entity has active business activities The company is subject to tax in its jurisdiction on Indonesian sourced income; and The requirements for DTT relief are complicated and subject to interpretation.

As a general rule the beneficial owner must: be resident of a treaty country provide the required documentation Ireland (Domestic Exemption at Source/ Reclaim 20 0* *Under the DWT scheme residents of treaty countries are entitled to full exemption on dividend withholding tax not be an agent, nominee, trustee or conduit 20 0 0 Documentation required to enable RBC Investor & Treasury Services to complete the required forms (one off requirement per Tax Questionnaire, renewable should details change) 2. Tax Office details and reference number (one off requirement per Tax Questionnaire, information update required should details change) 3. Tax Office Authority to enable RBC Investor & Treasury Services to request certifications of residency Clients are initially assigned to a general account to which the maximum withholding tax rate is assigned Once the certificate of residency has been received, and if there is a Power of Attorney in place, RBC Investor & Treasury Services will complete a DWT form on behalf of the client and re-assign the account to the exempt location If tax has been deducted during the time that the client was assigned to the taxable account then a retroactive reclaim is possible to obtain the difference between the maximum tax deducted and the treaty rate Israel 1 (Relief at Source/Reclaim 25 15 (10) The entity must be subject to tax in the UK in order to benefit from the treaty rate 0 0/25 Non-resident investors are subject to a 24% withholding tax rate on interest from short term government bonds and, interest from redemption of Makams 15 Documentation required Relief at source and reclaims: Relief at source and reclaims: A114 form Certificate of residence Italy 1 (Relief at Source 26 11 Effective July 26 12.5/0 10/0 Documentation required 1. Notarized Power of attorney (2 if

29, 2009, qualifying pension funds resident in countries on the new Italian white list are eligible to a reduced withholding tax rate of 11% assets are going to be held domestically and at Euroclear) to enable RBC Investor & Treasury Services to complete the required forms (one off requirement per Tax Questionnaire, renewable should details change) 2. Tax Office details and reference number (one off requirement per Tax Questionnaire, information update required if details change). 3. Tax Office Authority to enable RBC Investor & Treasury Services to request residency (Details provided in the Tax Questionnaire) Once the required information / documentation have been provided by the client RBC Investor & Treasury Services will complete an annual certificate on the client s behalf to secure treaty relief at source in respect of equities. After having received the required information / documentation from the client RBC Investor & Treasury Services will complete a one off declaration (renewable should any details change) on the client s behalf to secure exemption at source in respect of interest income Japan 1 (Relief at Source 15.315 0 Effective 01.01.07 UK resident pension funds can benefit from tax exemption on Japanese income 15.315 15.315/0* *0% rate applies to government bonds if held on the Bank of Japan's book entry system and the intermediary acts as a qualifying intermediary 0 Effective 01.01.07 UK resident pension funds can benefit from tax exemption on Japanese income Documentation required 1. Tax Office details and reference number (one off requirement per Tax Questionnaire, information update required should details change) to enable RBC Investor & Treasury Services to request residency certifications (details provided in the Tax Quest) Certificates of residence Income breakdowns Lithuania 15 15 10 10 10 Interest: Effective 01.01.10 interest paid to legal entities resident in EEA and DTA countries is exempt Luxembourg 15 15 0 0 0 Malaysia 25-15 15 10 Dividends: There is no dividend withholding tax. However, there is a 25% tax charge on the gross dividends which is a deduction of Malaysian tax credits. Mexico 10 0 30/10/4.9 0 15 Interest: 10% paid on negotiable instruments, 4.9% on interest paid to banks, 30% rate applies to residents of the black list countries Morocco 15 25 10 10 10

Netherlands (Reclaim 15 10 (5) 0 0 0 Documentation required Certificate of residency - Obtained s tax office Submitted to agent bank in the Netherlands New Zealand1 (Relief at Source Norway 1 (Relief at Source Territory/Reclai m 30 15 15/2* 25 15/0 (25)* *The Tax Exemption Model provides a WHT exemption for corporate shareholders resident in the EU/EEA effective retroactively from 01.01.04 *2% rate applies where Approved Issuer Levy has been applied for 15/2/0 10/2/0 Documentation required None required 0 0 0 Documentation required *For The Exemption Model only: 1. Tax Office details and reference number (one off requirement per Tax Questionnaire, information update required should details change) 3. Beneficial owner questionnaire None required *For The Exemption Model only: First-time reclaim application with accompanying Norwegian Attestation and Certificate of Residency. Thereafter it should be possible to assign the investor to a segregated account and apply exemption at source on provision of an annual attestation. Pakistan 7.5/12.5 15 10 10 15 Dividends: 7.5% = dividends paid by companies engaged in power generation or by purchasers of privatized power companies and by companies engaged exclusively in mining operations other than petroleum Peru (Non- Treaty 5 n/a 30 30 n/a Philippines 30 25 30 30 15 Dividends: The rate is reduced to 15% if the country of domicile of the recipient allows a tax credit for taxes deemed payable in the Philippines equivalent to 17%. Due to the restrictive and unworkable time frames introduced in the market, reduction at source is currently unavailable

Poland 1 (Relief at Source 19 10 20 20 5 Documentation required Certificate of residency Portugal 25 0 (25) Under UK treaty only beneficiaries subject to tax are eligible, therefore pension funds generally do not get relief 25/0* *0% rate applies to certain Treasury bonds 0 0% rate applies to all government bonds 10 Documentation required N/A Russia 15 10 15/20 0 0 Dividends: Under UK treaty only beneficiaries subject to tax are eligible Interest: 15% rate applies to certain types of state and municipal securities Singapore 0 15 15 15 10 N/A Slovakia 0 15 0 0 0 South Africa 1 (Relief at Source/Reclaim 20 10 (10) 0 0 0 South Korea 22 15 15.4 15.4 10 Documentation required Supporting documentation from an official source (i.e. HMRC) that states that the client is a UK Pension Fund. Once the required documentation has been provided by the client, RBC Investor & Treasury Services will complete a form 72/2 (Application for Entitlement to reduce the Tax Rate on Domestic Sourced Income) on the client s behalf to secure treaty relief at source in respect of equities, and submit to the South Korean agent.

Spain (Reclaim 19 0 (19) 19/0* *A domestic exemption is available on interest from qualifying corporate bonds 19/0* *0% rate applies to certain Government Treasury stock. 0 Interest paid to an EU resident without a permanent establishmen t in Spain is exempt on provision of a certificate of residence Documentation required Quick Refund Procedure: Certification of Tax Residency requested s tax office annually Income breakdowns Standard Reclaim Procedure: Certified Tax Reclaim form Income breakdowns Sri Lanka 10 15 10 0 10 Sweden 1 (Relief at Source/ Reclaim 30 5 (25) 0 0 0 Documentation required Relief at Source & Reclaim: Relief at Source: Beneficial owner breakdown to be provided prior to each dividend payment Reclaim: Tax reclaim application Sent to client s tax office for certification of residency Submitted to agent bank in Sweden Switzerland (Reclaim 35* *Effective 1st January 2011, Swiss companies may pay all or part of their dividends tax free under the capital 0 (35) Effective 01.01.09 an exemption applies if the dividend is paid to a beneficial owner that is a pension scheme 35 35 0 Documentation required 1. Power of Attorney Tax reclaim application incorporating shareholder percentage information Sent to client s tax office for certification of residency Submitted to Swiss Tax Authorities annually

distribution principle. Taiwan 20 10 15 15 10 Dividends: 30% = payment to non- resident individuals, 25% = payments to non- resident corporations, 20% = payments on investments approved by the ROC government pursuant to the Statute for Investment by Foreign Nationals or the Statute for Investment by Overseas Chinese Thailand 10 10 15 15/0 10 Documentation required Turkey 15 20 0 0 15 US (Relief at Source 30 0 Relates to payments to authorized pension funds 30/0* *0% rate applies to portfolio debt securities and government interest 30/0* *0% rate applies to portfolio debt securities and government interest Interest: 15% = short term bills, Government/Corporate bonds/ Financial Debentures, Securitization Products e.g. ABS, REITs and RAETs, and repos on all of these. 20% applies to other forms of interest. None required None required Interest: 0% rate applies to Government securities. However the Earthquake Tax Scheme effective 1 January 2000 applies a surcharge of between 4% and 19% depending on maturity. 0% rate under treaty applies to interest derived by Government. 0 Documentation required W8-BENE Form (renewable should details change, per Tax Questionnaire) It is not possible for RBC Investor & Treasury Services to complete this document on behalf of the beneficial owner Once the appropriate W8-BENE form has been received and validated, the client will receive all income going forward with the correct rate of withholding tax applied Venezuela 34 10 34 34 5 Interest: Withholding tax is imposed on 90% of the gross payment for individuals (the effective rate is 30.6%). Interest paid to financial institutions is set at a flat rate of 4.95%. 1 Generally speaking, where possible, RBC Investor & Treasury Services will take the necessary action in order to obtain upfront relief at source on income. These territories have a mixture of reclaim and relief at source opportunities. In addition where a timing issue necessitates full withholding on income, retroactive reclaims will be processed in the above territories. 2 Although pension funds are eligible to apply for exemption on Australian income, this is at the discretion of the Australian Tax Authorities. Should exemption not be applied for or approval not granted the standard treaty rates will be applied at source.

Additional comments: Relief at Source Territories (Or unspecified territories) - Please note that where standard withholding tax rates are lower than the specified treaty rate that the standard rate will apply. Reclaim Territories - Statutes and refund timeframes: Statutes & Refund Timeframes Tax rates for other markets in which investment is possible through RBC Investor & Treasury Services are available on request.