BOC Report and accounts 2005 - Alle jaarverslagen

142 The BOC Group plc Annual report and accounts 2005 Shareholder information
Taxation
A summary of the principal tax consequences for certain beneficial holders of Ordinary shares of BOC and ADSs representing Ordinary shares is set
out below.This summary applies to citizens or residents of the UK or US, or otherwise who are subject to UK tax or US federal income tax on a net
income basis in respect of such securities. It is not intended to be a comprehensive analysis of all of the potential tax consequences of holding Ordinary
shares or ADSs and does not purport to deal with persons who hold their Ordinary shares or ADSs in special circumstances, such as financial institutions,
tax exempt organisations, insurance companies, dealers in securities, persons who own, directly or indirectly or by attribution, ten per cent or more of the
outstanding share capital or voting stock of BOC, persons holding Ordinary shares or ADSs as part of a ‘hedge’,‘straddle’ or other risk reduction
transaction, or who acquired such Ordinary shares or ADSs through the exercise of an employee stock option or otherwise as compensation.All holders
and investors are advised to consult their tax advisors on the tax implications of their particular holdings, including the consequences under applicable state
and local law.
The statements of tax laws set out below are based on the laws in force at the date of this report unless otherwise noted, and are subject to any
subsequent changes in UK and US law, or in any double tax convention between the UK and the US.
UK shareholders
The following information applies to individuals who hold Ordinary shares and who are resident or ordinarily resident in the UK for UK tax purposes
(UK resident holders).
Taxation of capital gains
A UK resident holder will be liable to UK tax on the gain from the disposal of Ordinary shares. For the purposes of calculating the gain from the disposal of
Ordinary shares, a UK resident holder who held Ordinary shares prior to 31 March 1982 may substitute the market value of such shares as at that date for
the original cost of such shares.The market value of Ordinary shares on 31 March 1982 was 168.75p per Ordinary share.
A UK resident holder may also be entitled to indexation relief and taper relief when selling shares. Indexation relief is calculated on the market
value of shares held at 31 March 1982 and on the cost of any subsequent purchases from that date. Indexation relief is not available for periods after
1 April 1998.Taper relief provides UK resident holders with relief from tax on gains accrued on the disposal of Ordinary shares held or acquired after
5 April 1998.The amount of taper relief available depends on the length of time such shares have been held and on the UK resident holder’s individual facts
and circumstances.
Taxation of dividends
A UK resident holder is entitled to a tax credit on receipt of a cash dividend.The tax credit is a fixed proportion of the dividend and is currently 1 /9th of the
cash dividend received.
The income subject to UK income tax is the sum of the dividend and the attached tax credit, with the tax credit being available as a deduction against
any resulting tax liability.
Special rates of tax apply to dividend income: the ‘ordinary rate’ is ten per cent and applies to individuals liable to tax at the basic or lower rates of tax;
the ‘upper rate’ is 32.5 per cent which applies to the extent that income exceeds the basic rate band.
For a UK resident holder liable to income tax only at the basic or lower rates of tax, there will thus be no further tax liability in respect of the dividend
received. If, however, the UK resident holder is subject to income tax at the higher rate there will be a further tax liability on the sum of the cash dividend
received and the associated tax credit.Where a UK resident holder’s tax liability is less than the associated tax credit, no refund is available.
By way of example, the payment by BOC of a cash dividend of £90 would have an associated tax credit of £10 and a UK resident holder is treated as
receiving a gross dividend of £100.The upper rate tax of 32.5 per cent on the gross dividend is £32.50.Therefore the UK resident holder liable to tax at the
upper rate will have a tax liability of £22.50, being the tax liability on the gross dividend of £32.50 less the tax credit of £10.
Stamp duty
Stamp duty or stamp duty reserve tax at the rate of 0.5 per cent of consideration payable is normally payable on the purchase price of shares.
Inheritance tax
Individual shareholders may be liable to inheritance tax on the transfer of Ordinary shares. Inheritance tax may be charged on the amount by which
the value of a shareholder’s estate is reduced as a result of any transfer by way of gift or other gratuitous transaction made by them or treated as made
by them.
US holders
For the purposes of this summary, a US holder is a beneficial owner of ADSs who is an individual citizen or resident of the US, a corporation or other entity
organised under the laws of the US or any state thereof, an estate the income of which is subject to US federal income taxation regardless of its source, or
a trust if a court within the US is able to exercise primary supervision over the administration of the trust and one or more US persons have the authority
to control all substantial decisions of the trust.
US holders of ADSs are treated as owners of underlying Ordinary shares for the purposes of the convention relating to estate and gift tax (the Estate
Tax Convention) and for the purposes of the US Internal Revenue Code of 1986, as amended (the Code).