Scrip Circular
The following regulated information, disseminated pursuant to DTR6.3.5, comprises the scrip dividend circular for the third interim dividend for 2014 which was sent to shareholders of HSBC Holdings plc on 5 November 2014. A copy of the scrip dividend circular is available at www.hsbc.com/dividends.
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are
in any doubt aboutthis document or as to the actionyou should take, you should consulta stockbroker, solicitor, accountant or other appropriate independent professional adviser.
If you sold or transferred all or some of your ordinary shares on or before 22 October 2014, but those shares are includedin the number shown in box 1 on your Form of Election,Entitlement Advice or Dividend Notification email for the third interim dividend for 2014, you should, without delay, consult the stockbroker or other agent through whom the sale or transfer was effected for advice on the action you should take.
Hong Kong Exchanges and Clearing Limitedand The StockExchange of Hong Kong Limited take no responsibility for the contents of this document,make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contentsof this document. The ordinary shares of HSBC Holdings plc trade under stock code 5 on The Stock Exchange of Hong Kong Limited.
Dear Shareholder
5 November 2014
SCRIP DIVIDENDSCHEME AND PAYMENTOF DIVIDENDS IN UNITED STATES DOLLARS, STERLING OR HONG KONG DOLLARS
On 6 October2014, your Directorsdeclared a third interim dividendfor 2014 of US$0.10 per ordinary share, payable on 10 December2014. You may elect to receive:
1. a scrip dividend of new shares at a 'Market Value' of US$10.1178(£6.2750) per ordinaryshare;
2. a cash dividend in United States dollars, sterling,or Hong Kong dollars; or
3. a combination of cash and scrip dividend.
For illustration, using the exchangerates on 29 October 2014, the third interim dividendper ordinary share in sterling and Hong Kong dollars would have been approximately £0.0620and HK$0.7755. The preciseamounts which will be payable per ordinaryshare in either sterling or Hong Kong dollars on 10 December 2014 will be convertedfrom United States dollars using the exchangerates on 1 December 2014 as explained on page 3.
Please read this letter carefully.
In the absence of other instructions the dividend will be paid to you as described below. If you intend to give alternative instructions on how you wish to receive this dividend they must be received by the Company's Registrars by close of business on 27 November 2014. As an alternative to returning a printed Form of Election to make an election or writing to the Registrars to revoke a standing instruction for new shares, you may give instructions electronically through the Registrars' Investor Centre, at the appropriate website address given on page 12. Instructions must be receivedby close of business on 27 November 2014. Before using this facility you will need to register with the Registrars' Investor Centre and you should do so without delay so that the formalities can be completed in time for you to give your instructions for this dividend by close of business on 27 November 2014. The use of the Registrars' Investor Centre to give your dividend instructions to the Registrars is referred to throughout this document as giving an Electronic Instruction. If you provide an email address to receive electronic communications from HSBC we will send notifications of your dividend entitlements by email. If you have not given a standing instruction to receive new shares you will, in addition to the email notification (the "Dividend Notification email"), be sent a printedForm of Election until such time as you register with the Registrars' Investor Centre and are able to give your instructions electronically.
HSBC Holdings plc
8 Canada Square, London E14 5HQ, United Kingdom Web: www.hsbc.com
Registered in England: number 617987. Registered Office: 8 Canada Square, London E14 5HQ Incorporated in England with limited liability
1. Scrip dividend
If you have already given standing instructions to receive new shares under the Scrip Dividend Scheme, you will have been sent an Entitlement Advice. You need take no further actionif you wish to receive the number of new sharesshown on the Entitlement Advice.If you do not wish toreceive the maximumentitlement to new shares, a letter revokingyour standing instructions must be received by the appropriate Registrars, at the address given on page 12, or an Electronic Instruction must be given, by close of business on 27 November 2014. If you wish to receive new shares in respect of only part of this dividend,or if you wish to receive your cash dividendin any combination of United Statesdollars, sterling and Hong Kong dollars, pleaseask the Registrars for a Form of Electionin time to return it to them by close of businesson 27 November 2014, orgive an Electronic Instruction by that time.
If you have not previously given standing instructions to receive new shares under the Scrip Dividend Scheme and you wish to receivenew shares in lieu of the cash dividend, you should either complete and sign a printed Form of Electionand return it to the appropriate Registrars at the address given on page 12, or give an Electronic Instruction, by close of business on 27 November2014. If you take no action, you will receivethe dividend in cash in the currency indicated on your Form of Election or DividendNotification email.
We will calculate your entitlement to new shares using a 'Market Value' of US$10.1178(£6.2750) for each new share. An explanation of the calculation of 'Market Value' and the basis of allotment of new shares is set out in paragraphs 2 and 3 of the Appendix to this letter. Since fractions of shares cannot be issued, if you have elected to receive new shares in relation to all or part of your holding of ordinary shares, any residual dividend entitlement will be carried forward in United States dollars and added to the next dividend. Residual dividend entitlements carried forward will not bear interest.
The scrip dividendalternative will enable shareholders to increase their holdings of shares without incurring dealing costs or stamp duty. To the extent that shareholders elect to receive new shares, the Company will benefitby retaining cash which would otherwise be payable by way of dividend. The Appendix to this letter sets out details of the Scrip Dividend Scheme and providesa general outline of the tax considerations in the United Kingdom and overseas.
Please read the next sectionregarding the paymentof dividends in cash, even if you wish to receive your dividend in the form of new shares.
2. Cash dividend
If your shareswere recorded on the Hong Kong OverseasBranch Register at close of business on 24 October 2014, you will automatically receive any dividendspayable to you in cash in Hong Kong dollars, unless you have previously elected to receive payment in United States dollars or sterling.
If your shares were recordedon the Principal Register at close of business on 24 October2014, you will automatically receive any dividends payable to you in cash in sterling,unless you have previously elected to receivepayment in UnitedStates dollars or Hong Kong dollars. However, if your address is in the United States you will automatically receive any dividends payable to you in cash in United States dollars, unless you have previously elected to receive payment in Hong Kong dollars or sterling.
If your shares were recordedon the Bermuda Overseas Branch Register at close of business on 24 October 2014, you will automatically receive any dividendspayable to you in cash in United States dollars, unless you have previously elected to receivepayment in Hong Kong dollars or sterling.
The currency in which any dividends payable to you in cash are to be paid is stated on your Formof Election, Entitlement Advice or DividendNotification email. If you wish to give standing instructions to receivesuch dividends in one of the otheravailable currencies (United States dollars, sterling or Hong Kong dollars), you should eithercomplete the One Currency Election on page 2 of a printedForm of Election or Entitlement Advice, or give an Electronic Instruction. Completion of the One Currency Electionon the reverse of a printed Form of Election or Entitlement Advice will not revokea standing instruction to receive the maximum entitlement to new shares under the Scrip Dividend Scheme.
3. Combination of cash and scrip dividend
If you wish to receivethis dividend in a combination of the availablecurrencies or in a combination of cash and new shares, you must eithercomplete Section B on page 1 of the Form of Election or give an Electronic Instruction. If you have receivedan Entitlement Adviceand not a Form of Electionand you wish to receiveyour dividend in cash, in any combination of the available currencies, or in a combination of cash and new shares, you should either write to the appropriate Registrars at the address given on page 12 to revoke your standing instructions for scrip dividends and to requesta Form of Election in time to return it to them by closeof business on 27 November 2014, or give an Electronic Instruction by this time.
Dividends payablein sterling or Hong Kong dollars on 10 December2014 will be converted from United States dollars at the forward exchange rates quoted by HSBC Bank plc in London at or about 11.00 am on 1 December 2014.The exchange rateswill be announced to the London, Hong Kong, New York, Paris and Bermuda stock exchanges.
Dividend warrants and, where applicable, new share certificates are expected to be mailed to shareholders entitled theretoat their risk on or about 10 December 2014.
Whether you electto receive your dividends in cash or in new shares,it is recommended that you provide payment instructions eitherthrough the Registrars' Investor Centre or by completing and returning the DividendPayment Instruction on page 2 of a printed Form of Electionor Entitlement Advice, so that any dividends payableto you in cash can be sent to your bank account(s) as you require. It is not necessary for you to provide payment instructions if you have already given instructions for cash dividendsto be sent direct to your bank account and you do not wish to change those instructions.
Yours sincerely
Ben J S Mathews
Group Company Secretary
APPENDIX
SCRIP DIVIDEND SCHEME ('THE SCHEME')
1. Terms
The Scheme, authority for which shareholders renewed at the Annual General Meeting on 25 May 2012 for a further five-year period, will apply in respect of the third interim dividend for 2014.
Any person who had acquired ordinary shares registered on the Hong Kong OverseasBranch Register should have lodgedthe share transfer with the Hong Kong OverseasBranch Registrar before 4.00 pm on 24 October 2014 in order to receive the dividend. Any person who had acquiredordinary shares registered on the PrincipalRegister in the United Kingdom or on the Bermuda Overseas Branch Register should have lodged the share transferwith the Principal Registrar or the Bermuda Overseas Branch Registrar before 4.00 pm on 24 October 2014 in order to receive the dividend.
Holders ofordinary shares on theHong Kong Overseas BranchRegister as at the close of business in HongKong on 24 October2014 or on the Principal Register as at the close of businessin England on 24 October 2014 or on the Bermuda Overseas Branch Register as at the close of businessin Bermuda on 24 October 2014 (other than those shareholders referred to in paragraph 6) will be able to elect to receive new shares in respect of all or part of their holdings of shares as an alternative to receiving the third interim dividend for 2014 of US$0.10 per ordinary share in cash.
The new ordinaryshares will be issued subject to the Articles of Association of the Company and will rankequally with the existing issued ordinaryshares in all respects.
2. Market Value
The 'Market Value'is the average of the middle market quotations for the ordinaryshares on the LondonStock Exchange, as derived from the Daily Official List,for the five business days beginning on 23 October 2014. The Market Value of £6.2750 converted into United States dollars using the exchange rate quoted by HSBC Bank plc in London at 11.00 am on 29 October 2014 is US$10.1178 for each new share.
3. Basis of allotment and examples
Your entitlement to new shares is based on:
(a) the Market Value (as defined in paragraph 2 above) of US$10.1178per share;
(b) the cash dividend of US$0.10 per share; and
(c) the number of ordinary shares held by you on 24 October 2014 ('the record date'). The formula used for calculating your entitlement is as follows:
Number of shares held at the record date x cash dividend per share + any residualdividend entitlement
brought forward = maximum dividend available for share election
Maximum dividend available = maximum number of new shares
Market Value (rounded down to the nearest whole number)
You may elect to receive new shares in respectof all or part of your holding of ordinary shares. No fraction of a share will be issued.
If you elect to receive the maximum number of new shares in lieu of your dividend,a residual dividend entitlement may arise, representing the difference between the total Market Value of the new shares and the maximum dividend available on your shareholding. This residual dividend entitlement will be carried forward in United States dollars (without interest) to the next dividend (see Example 1).
Example 1
If you have 1,000 ordinary shares and a residual dividend entitlement brought forward of US$4.00, your maximum entitlement will be calculatedas follows:
Your cash dividend(1,000 x US$0.10) US$ 100.00
Plus residual dividend entitlement brought forward US$ 4.00
Maximum dividend available US$ 104.00
Number of new shares = US$104.00 = 10.2789 = 10 new shares US$10.1178
Total Market Value of 10 new shares = 10 x US$10.1178 US$ 101.18 Plus residual dividend entitlement to be carried forward (US$104.00 - US$101.18) US$ 2.82
US$ 104.00
If you elect to receiveonly part of your dividendas new shares, you will receive the balance in cash.Any residual dividendentitlement relating to that portion of your holding in respect of which you have elected to receivenew shares will be carriedforward in UnitedStates dollars (without interest) to the next dividend (see Example 2).
Example 2
If you have 1,000 ordinary shares and a residual dividend entitlement brought forward of US$4.00 your maximum entitlement will be 10 new shares, as shown in Example 1. Should you wish to electfor new shares on only 600 of your existing1,000 ordinary shares,you should insert the number 600 in the box in SectionB (i) of a printedForm of Election or, if giving an Electronic Instruction, in the relevant box in the Registrars' InvestorCentre. The electionfor new shares, the cash balance due to you, and the residual entitlement to be carried forward to your next dividend, would be calculated as follows:
Your cash dividend (1,000 x US$0.10) US$ 100.00
Plus residual dividend entitlement brought forward US$ 4.00
Maximum dividendavailable US$104.00
|
600 existing shares on which you wish to receive new shares (600 x US$0.10) |
US$ |
60.00 |
|
Plus residual dividend entitlement brought forward |
US$ |
4.00 |
|
Total available to elect for new shares |
US$ |
64.00 |
Number of new shares = US$64.00 = 6.3255 = 6 new shares US$10.1178
Total Market Value of 6 new shares = 6 x US$10.1178 US$ 60.71
Plus residual entitlement to be carried forward (US$64.00- US$60.71) US$ 3.29 Plus balance of maximum dividendavailable to be paid in cash
(US$104 - US$64 ) US$ 40.00
Maximum dividend available US$ 104.00
In addition to the 6 new shares,you will receive a cash balanceof US$40.00 and US$3.29 will be carried forward in United States dollars (without interest) to your next dividend. The cash balance will be paid to you in the currencyindicated in the Dividend Notification email or in box 4 on the Formof Election, unless you give instructions to the contrary by indicating the currency/currencies you wish to receivein the boxes in sectionsB (ii) to B (iv) of a printedForm of Election or, if giving an Electronic Instruction, in the relevant boxes in the Registrars' Investor Centre. An example of how Section B of a printed Form of Election might be completed is given on page 6.
|
Section B |
Complete this section with the relevant numbers of shares if you wish to receive your dividend in cash in a combination of the available currencies or in a combination of cash and new shares |
||
|
I/We wish to receive my/our dividend in shares and/or in cash, based on the number of |
600
GBP 134 |
shares |
|
|
ordinary shares shown in box 1 above, as follows: |
|||
|
in shares (i) Number of shares on which I wish to receive new shares |
|||
|
in cash (ii) Number of shares on which I wish to receive cash in sterling |
shares |
||
|
(iii) Number of shares on which I wish to receive cash in US dollars |
USD 133 |
shares |
|
|
(iv) Number of shares on which I wish to receive cash in Hong Kong dollars |
HKD 133
1000 |
shares |
|
|
Total number of existing shares (the sum of (i) to (iv)) |
shares |
||
If you wish to receive a specific number of new shares,you may calculate the number of existingshares on which you need to elect as follows:
|
Number of new shares you wish to receive x Market Value |
= |
Number of shares on which to elect to receive new shares |
|
Cash dividend of US$0.10 per share |
|
(rounded up to the nearest whole number) |
4. Payment of residual dividend entitlements
Residual dividend entitlements will be payable in cash (without interest) if, at any time, you:
• dispose of your entire holding; or
• receive the full cash dividend on the whole of your holding; or
• revoke your standing instructions to receive scrip dividends; or
• so request in writing to the appropriate Registrars.
5. How to participate in the Scheme
(a) If you have already given standinginstructions to receive new shares under the Scheme,
you will have been sent an Entitlement Advice. You need take no further action unless you wish
to revoke your standing instructions or to elect to receive a smallernumber of new shares.If you
do not revoke your standing instructions by 27 November 2014, you will receive the number of
new shares shown in box 4 on the Entitlement Advice.
If you do not wish to receive new shares, a letter revoking the standinginstructions to receive scrip dividends must be received by the Registrarsat the appropriate address given on the Entitlement Advice, or an Electronic Instruction must be received, by close of business on 27 November 2014. A cash dividendwill then be paid on your entire holding in the currency shown in box 6 on theEntitlement Advice.If, however, you wishto receive newshares in respect of only part of this dividend, or if you wish to receive any dividend payableto you in cash in a currency/currencies other than that shown in box 6 on the Entitlement Advice, please also ask the Registrars for a Form of Election in time to return it to them, or give an Electronic Instruction, by close of business on 27 November 2014. In any event, if you revoke your standing instructions you will receive, for any futuredividends to which the Scheme applies, a printedForm of Election and/or Dividend Notification email and, if you register with the Registrars' Investor Centre, you will be able to give an Electronic Instruction.
(b) If you have not previously given standinginstructions to receive new shares under the Scheme and you wish to receive new shares in lieu of a cash dividendon this occasion only, an electionto participate in the Schememust be made on a printed Form of Election or by giving an Electronic Instruction through the Registrars' Investor Centre, each of which should be completed after reading this letter. If you wish to elect to receive the maximum entitlement to new sharesfor this dividend, you may do so by inserting an 'X' in the box in SectionA (i) of a printed Form of Election or by electing for new shares when giving an Electronic Instruction. If you wish to elect to receive a smaller number of shares than the maximum entitlement, you shouldcomplete Section B of the printed Form or make the appropriate election when giving an Electronic Instruction. To be valid in respect of the dividend payable on 10 December 2014, a printed Form of Election must be completedcorrectly, signed and received by the Registrars at the address given on page 2 of the Form, or an Electronic Instruction must be received, by close of business on 27 November 2014.
(c) If you have not previously given standing instructions to receive new shares under the Scheme and you wish to receive the maximum entitlement to new shares automatically for thisand for subsequentdividends to which the Scheme applies, you may do so by inserting an 'X' in the box in Section A (ii) of a printed Form of Election or by making the appropriate election when giving an Electronic Instruction. To be valid in respect of the dividend payable on 10 December 2014 a Form of Election must be completed correctly, signed and received by the Registrars at the address given on page 2 of the Form, or an ElectronicInstruction must be received, by close of business on 27 November 2014.
Completing Section A (ii) of the printed Form or making the appropriate election when giving an Electronic Instruction will ensure that you receive your maximum entitlement to new shares offered in lieu of the third interimdividend for 2014 payableon 10 December 2014 and for subsequent dividends. Your standing instructions may be revoked by giving signed noticein writing to the appropriate Registrars or by giving an Electronic Instruction on or beforethe final date for receiptof printed Forms of Election or Electronic Instructions in respect of that dividend. Your standinginstructions will lapse automatically if at any time you cease to hold any ordinary shares.
ON THE ASSUMPTION THAT NO RESIDUAL DIVIDENDENTITLEMENT IS BROUGHT FORWARD, SHAREHOLDERS WITH A HOLDING AS AT THE RECORD DATE OF FEWERTHAN 102 ORDINARY SHARES WHO HAVE GIVEN STANDING INSTRUCTIONS TO RECEIVE SCRIP DIVIDENDS, AND SHAREHOLDERS WHO GIVE AN ELECTION TO RECEIVE SCRIP DIVIDENDS ON FEWER THAN 102 ORDINARY SHARES,WILL NOT RECEIVEANY NEW SHARES ON THIS OCCASION AND WILL HAVE THEIR DIVIDEND ENTITLEMENT RELATING TO THOSE SHARES CARRIED FORWARD IN UNITEDSTATES DOLLARS (WITHOUTINTEREST) AS DESCRIBED ON PAGE 2.
6. Overseas shareholders
No person receiving a copy of this document, a Form of Election or a Dividend Notification email
in any jurisdiction outside the United Kingdom ('UK') or Hong Kong may treat the same as offering
a right to elect to receive new shares unless such offer could lawfully be made to such person
without the Company being required to comply with any governmentalor regulatory procedures
or any similarformalities. It is the responsibility of any person outsidethe UK and Hong Kong
who wishes to receive new shares under the Scheme to comply with the laws of the relevant
jurisdiction(s), includingthe obtaining of any governmentalor other consents and compliance with
all other formalities. It is also the responsibility of any person who receives new shares in lieu of a
cash dividend to comply with any restrictions on the resale of the shares which may apply outside
the UK and Hong Kong. For example, shareholders in Ontario who have new shares allottedto
them under the Scheme must ensure that the first trade of their new shares is executed on a stock
exchange outside Canada.
7. Issue of share certificates and listing of new shares
Application will be made to the UK Listing Authorityand to the London Stock Exchange for the
new shares to be admitted to the Official List and to trading respectively, to the Stock Exchange of
Hong Kong for listing of, and permissionto deal in, the new shares, and to the New York, Paris and
Bermuda stock exchanges for listing of the new shares.
Existing ordinaryshares on the Principal Register may be held either in certificated form, or in uncertificated form through CREST. Where a shareholder has holdings of ordinary shares in both certificated and uncertificated form, each holding will be treated separately for the purpose of calculating entitlements to new shares.
Definitive share certificates for the new shares issued under the Scheme in respect of holdings in certificated form are expected to be mailed to shareholders entitled thereto at their risk on or about 10 December 2014, at the same time as warrants in respect of the cash dividend are mailed. New shares issued under the Scheme in respect of holdings of shares which are inuncertificated form will also be issued in uncertificated form. The Company will arrange for the relevant shareholders' stock accounts in CREST to be credited with the appropriate numbers of new shares on 10 December 2014. Dealings in the new shares in London, Hong Kong, Paris and Bermuda,and in the American Depositary Shares in New York are expected to begin on 10 December 2014.
8. If you have sold or transferred your shares
If you sold or transferred all or some of your ordinary shares on or before 22 October 2014
(the date on which the shares eligible for the third interim dividend for 2014 were last quoted
cum-dividend on the London, Hong Kong, Paris and Bermuda stock exchanges), but those shares
are nevertheless included in the number shown in box 1 on your Form of Election,Entitlement
Advice or Dividend Notification email, you should, without delay, consult the stockbroker or other
agent through whom the sale or transfer was effected for advice on the action you should take.
9. General
If all shareholders were to elect to take up their entitlements to new shares under the Scheme in respect
of the third interim dividend for 2014, approximately 189,647,134 new shares would be issued,
representing an increase of 0.99 per cent in the issued ordinary share capital of the Company as at
28 October 2014.
The total cost of the third interim dividend for 2014, ignoring any elections for the scrip alternative, is approximately US$1,919million. The applicable tax credit is the sterling equivalent of approximately US$213 million.
Whetheror not it is to your advantageto elect to receive new shares in lieu of a cash dividend or to elect to receive paymentin United Statesdollars, sterling or Hong Kong dollars is a matter for individual decision by each shareholder. HSBC cannot acceptany responsibility for your decision. The effect on the tax positionof any shareholder will depend on that shareholder's particular circumstances. If you are in any doubt as to what to do, you should consult your professional advisers.
Noacknowledgement of receipt of a printed Form of Electionwill be issued.
10. Tax return
To assist shareholders who receive a scrip dividend,we will send a Notional Tax Voucher which
may be needed for tax returns. This will contain the following particulars:
• number of ordinary shares held by you at close of business on the record date;
• number of new shares allotted;
• total dividendpayable;
• residual dividend entitlement (if any) brought forward from previous dividend;
• residual dividendentitlement (if any) carried forward to the next dividend;
• cash equivalentof the new shares allotted; and
• amount of UK income tax treated as paid on the new shares.
11.Taxation
The precise tax consequences for a shareholder receiving a cash dividend or electing to receive
new shares in lieu of a cash dividend will depend upon the shareholder's own individual
circumstances. The followingis a general outline of the tax consequences in the UK and overseas,
based on currentlaw and practice. This outline assumesthat a holder of AmericanDepository
Shares ("ADSs")is the beneficial owner of the underlying ordinary shares for UK directtax
purposes. Based on published guidanceby Her Majesty's Revenue and Customs it is expectedthat
holders of ADSs should be treated as such by Her Majesty's Revenue and Customs.However, the
guidance is not considered in any detail in this outlineand holders of ADSs shouldconsult their
own professional advisors.
No tax is currentlywithheld from dividendspaid by the Company.Such dividends carry a tax credit equal to one-ninthof the dividend.
(i)Cash dividends
UK residentindividuals
Individual shareholders, who are resident in the UK for tax purposes, will generally be subject to
income tax on the aggregate amount of the dividend and associated tax credit. For example, on a cash dividend of US$90 an individual would be treated as having received dividend income equal to the sterling equivalent of both the US$90 dividend received and the associated tax credit of
Individual shareholders who are liable to income tax at the basic rate only will have no further tax to pay, as the tax liabilitywill be fully extinguished by the associated tax credit.
Individual shareholders who are not liable to income tax are not able to recover the tax credit. Individual shareholders subject to income tax at the higher rate of 40 per cent or the additional
rate of 45 per cent will be liable to tax at the dividend upper rate of 32.5 per cent or the dividend
additional rate of 37.5 per cent respectively on the aggregate of the dividend and the associated
tax credit. For example, if a higher rate or additionalrate tax payer were to receive a dividend
of US$90, he/she would for income tax purposes be treated as receiving dividend income equal
to the sterling equivalent of both the US$90 dividend received and the associated tax credit of
US$10. The related tax liability would be the sterling equivalent of US$32.50 (for a higher rate
tax payer) or US$37.50 (for an additional rate tax payer). However, the associated tax credit
equal to the sterling equivalent of US$10 would be set against the tax liability, leaving the
individual with net tax to pay of the sterling equivalentof US$22.50 or US$27.50 respectively.
UK resident trustees
Trustees of discretionary trusts, which are usually liable to pay income tax at the rate of 45 per
cent, may be required to account for additional tax on UK dividend income at 37.5 per cent of the
aggregate amount of dividendreceived and the associated tax credit, against which the effective
10 per cent tax credit may be offset.
UK residentcompanies
Corporate shareholders (other than certain insurance companies and companies which hold
shares on trading account) are not liable to corporation tax or income tax in respect of dividends
received from the Company.
UK residentgross funds/charities
There is no entitlement, for either a gross fund or charity,to a tax credit and consequently no
claim to recover the tax credit will be possible.
US resident shareholders
The summary information on US federal income tax does not purport to be a comprehensive
description of all the tax considerations that may be relevant to a holder of shares and must not
be used for the purpose of avoiding US federal tax penalties.
Shareholders who are subject to US federal income taxationon a net income basis must include cash dividends in income on the date that such holder or the depository holder of the ADSs receives them.
Subject to certain exceptions for positions that are held for less than 61 days or are hedged, and subject to a foreigncorporation being considered a 'qualified foreign corporation' (which includes not being classified for US federalincome tax purposes as a passiveforeign investmentcompany), certain dividends ('qualified dividends') received by an individual US shareholder generally will be subject to US taxation at a maximumrate of up to 20 per cent. Based on the Company's audited financialstatements and relevant market and shareholder data, HSBC does not anticipate being classified as a passive foreign investment company. Accordingly, dividends paid on the shares or ADSsgenerally should be treated as qualified dividends.
Distributions made on shares or ADSs and proceedsfrom the sale of shares or ADSs that are paid within the US, or through certain financial intermediaries to US shareholders, are subject to information reporting and may be subject to a US 'backup'withholding tax unless, in general, the US shareholder complies with certain certification procedures or is a corporation or other person exempt from such withholding tax.
Generally, US residents will not be subjectto any UK taxation in respectof UK dividend income nor will they be able to recover the associatedtax credit.
Other non-UK residents
Generally, non-UK residentswill not be subject to any UK taxation in respect of UK dividend
income nor will they be able to recover the associated tax credit.
Non-UK resident shareholders may be subject to tax on UK dividend income under any law to which that person is subject outside the UK. Non-UK resident shareholders should consult their own tax advisers with regard to their liability to taxation in respect of the cash dividend.
There are specialrules which apply to non-UK residentdiscretionary trusts in receiptof UK dividends. (ii)Scrip dividends
UK residentindividuals
The tax consequences of electing to receive new shares in lieu of a dividendare similar to those
of receiving cash dividends.
Individual shareholders who elect to receive new shares in lieu of a cash dividend will be treated ashaving received income of an amount which, when reduced by income tax at 10 per cent, is equal to the 'cash equivalent' which would have been received had they not elected to receive new shares. For example if a shareholder elected to receive new shares in lieu of a US$90 cash dividend, they would for UK tax purposes be treated as receiving income of US$100 and as having paid tax equivalent to US$10.
Individual shareholders who are liable to income tax at the basic rate only will have no further tax to pay. Individualshareholders liable to tax at the higher rate of 40 per cent or the additional rate of 45 per cent will be liable to pay additionaltax at the rate of 22.5 per cent or 27.5 per cent respectively of the aggregate of the cash equivalent and associated tax credit (which equates to the sterling equivalent of US$22.50 or US$27.50 respectively in the example above).
For income tax purposes, Her Majesty's Revenue and Customs will substitute the market value of the shares on the first day they are dealt in on the London Stock Exchange for the 'cash equivalent' if the difference between the cash dividend and the market value equals or exceeds 15 per cent of the market value.
For capital gains tax purposes the new shares will be treated as a separateholding. The base cost of these shares will equal the 'cash equivalent'. If the difference between the cash dividend and the market value equals or exceeds 15 per cent of the market value on the first day that the shares are dealt in on the London Stock Exchange,then the base cost will be the market value.
UK resident trustees
Trustees of discretionary trusts, which are liable to account for income tax on the income of the
trust will be treated as having received gross income equal to the 'cash equivalent' as described
above. Any tax liability will be calculated in line with the cash dividend treatment described
above (tax at a rate of 37.5 per cent being partiallyoffset by the effective 10 per cent tax credit).
UK residentcompanies
Corporate shareholders will not be liable to corporation tax on the receipt of new shares. For
capital gains tax purposesthe base cost of these shares will be nil.
UK residentgross funds/charities
There is no entitlement, for either a gross fund or charity,to a tax credit and consequently no
claim to recover the tax credit will be possible.
US resident shareholders
The summary information on US federal income tax does not purport to be a comprehensive
description of all the tax considerations that may be relevant to a holder of shares and must not
be used for the purpose of avoiding US federal tax penalties.
Shareholders who are subject to US federal income taxation on a net income basis and who elect to receive new shares in lieu of a cash dividend must include in income the fair market value of such shares on the dividend payment date, and the tax basis of those shares will equal such fair market value.
Subject to certainexceptions for positions that are held for less than 61 days or are hedged, and subject to a foreign corporation being considered a 'qualifiedforeign corporation' (which includes not being classifiedfor US federal income tax purposes as a passive foreign investment company), certain dividends ('qualified dividends') received by an individual US shareholder generally will be subject to US taxationat a maximum rate of up to 20 per cent. Based on the
Company's audited financialstatements and relevant market and shareholder data, HSBC does not anticipate being classified as a passive foreign investmentcompany. Accordingly, dividends paid on the shares or ADSs generallyshould be treated as qualified dividends.
Distributions made on shares or ADSs and proceedsfrom the sale of shares or ADSs that are paid within the US, or through certain financial intermediaries to US shareholders, are subject to information reporting and may be subject to a US 'backup' withholding tax unless, in general, the US shareholder complies with certain certification procedures or is a corporation or other person exempt from such withholding tax.
Generally, US residents will not be subject to any UK taxationin respect of UK dividend income nor will they be able to recover the associatedtax credit.
Other non-UK residents
Individual shareholders will be treated for UK tax purposes as having received income of an
amount which, when reduced by income tax at 10 per cent, is equal to the 'cash equivalent' which
would have been received had they notelected to receive new shares. No UK tax assessment will
be made on such individuals, but the tax credit cannot be recovered.
However, a non-UK resident shareholder may be subject to tax on the new shares received under any law to which that person is subjectoutside the UK. Non-UK resident shareholders should consult their own tax advisers with regard to their liability to taxation in respect of the new shares.
Residual dividend entitlement
A UK residentshareholder will not be subject to UK tax on any amount carried forward as a
residual dividendentitlement until either a new share or cash is received.The tax treatment of
the new share will be the same as that ofany other new ordinaryshare issued at the same time as
a scrip dividend.Any payment in cash will be taxed as a cash dividend.
A non-UK residentshareholder may be subject to tax on any amount carried forward as a residual dividend entitlement under any law to which that person is subject outside the UK. Non-UK resident shareholders should consult their own tax advisers with regard to their liability to taxation in respect of the residual dividend entitlement.
Timetable of events
|
Ordinary shares quoted ex-dividend in London, Hong Kong, Paris and Bermuda |
23 October 2014 |
|
American Depositary Shares quoted ex-dividend in New York |
22 October 2014 |
|
Record date for the third interim dividend for 2014 for holders on the Hong Kong Overseas Branch Register |
24 October 2014 |
|
Record date for the third interim dividend for 2014 for holders on the Principal Register or the Bermuda Overseas Branch Register |
24 October 2014 |
|
FINAL DATE FOR RECEIPT BY REGISTRARS OF FORMS OF ELECTION, REVOCATIONS OF STANDING INSTRUCTIONS FOR SCRIP DIVIDENDS AND ELECTRONIC INSTRUCTIONS |
27 November 2014 |
|
Exchange rate determined for payment of dividends in sterling and Hong Kong dollars |
1 December 2014 |
|
Payment date - dividend warrants mailed; new share certificates or Bermuda Overseas Branch Register Transaction Advices and Notional Tax Vouchers mailed; and shares credited to stock accounts in CREST |
10 December 2014 |
|
Expected first day of dealings in new shares in London, Hong Kong, Paris and Bermuda; and in American Depositary Shares in New York |
10 December 2014 |
Shareholders may at any time choose to receivecorporate communications in printed form or to receive notifications of their availability on HSBC's website. To receive future notifications of the availability of a corporate communication on HSBC's website by email, or revoke or amend an instruction to receive suchnotifications by email, go to www.hsbc.com/ecomms. If you provide an email address to receive electronic communications from HSBC we will also send notifications of your dividend entitlements by email. If you received a notification of the availability of this document on HSBC's website and would like to receive a printed copy of it, or if you would like to receive future corporatecommunications in printed form, please write or send an email (quoting your shareholder reference number) to the appropriate Registrars at the address given below. Printed copies will be provided without charge.
Further copies of this letter, replacementForms of Election and a Chinese translation of this and future documentsmay be obtained from the Registrars.
Principal Register Hong Kong Overseas Branch Register
Computershare Investor ServicesPLC Computershare Hong Kong Investor Services Limited The Pavilions Rooms 1712-1716,17th Floor
Bridgwater Road Hopewell Centre
Bristol 183 Queen's Road East
BS99 6ZZ Hong Kong SAR
United Kingdom Telephone: 2862 8555
Telephone: (44) 870 702 0137 Email: hsbc.ecom@computershare.com.hk
Email via website: Investor Centre:
www.investorcentre.co.uk/contactus www.investorcentre.com/hk
Investor Centre:
Bermuda Overseas Branch Register US Shareholder helpline
Investor RelationsTeam Telephone: 1 866 299 4242 HSBCBank Bermuda Limited
6 Front Street
Hamilton HM 11
Bermuda
Telephone: 299 6737
Email: hbbm.shareholder.services@hsbc.bm
Investor Centre: www.investorcentre.com/bm
Persons whose shares are held on their behalf by another person may have been nominatedto receive communications from HSBC pursuant to section 146 of the UK Companies Act 2006 ("nominated persons"). The main point of contactfor nominated persons remains the registered shareholder (for example your stockbroker, investment manager, custodian or other person who manages the investment on your behalf).Any changes or queries relating to nominated persons' personal details and holding (including any administration thereof) must continue to be directed to the registered shareholder and not HSBC's Registrars. The only exception is where HSBC, in exercising one of its powers under the UK Companies Act 2006, writes to nominated persons directly for a response.
Within this document the Hong Kong SpecialAdministrative Region of the People's Republic of China has beenreferred to as 'Hong Kong'.
The Directors of HSBC Holdingsplc are Douglas Flint, Stuart Gulliver, Kathleen Casey†, Safra Catz†, Laura Cha†, Sir Jonathan Evans†, Joachim Faber†, Rona Fairhead†, Sam Laidlaw†, John Lipsky†, Rachel Lomax†, Iain Mackay, Heidi Miller†, Marc Moses, Sir Simon Robertson† and Jonathan Symonds†.
† Independent non-executive Director
Produced by Computershare Investor Services PLC, Bristol, UK Printed byThe Westdale Press Limited, Cardiff, UK
12 001CSN2282
124N0C D01
This information is provided by RNS
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