Vodafone 2007 Annual Report Download - page 158

156 Vodafone Group Plc Annual Report 2007
Shareholder Information
continued
UK stamp duty and stamp duty reserve tax
Stamp duty will, subject to certain exceptions, be payable on any instrument
transferring shares in the Company to the Custodian of the Depositary at the
rate of 1.5% on the amount or value of the consideration if on sale or on the
value of such shares if not on sale. Stamp duty reserve tax (SDRT), at the rate
of 1.5% of the price or value of the shares, could also be payable in these
circumstances, and on issue to such a person, but no SDRT will be payable if
stamp duty equal to such SDRT liability is paid. In accordance with the terms
of the Deposit Agreement, any tax or duty payable on deposits of shares by
the Depositary or the Custodian of the Depositary will be charged to the
party to whom ADSs are delivered against such deposits.
No stamp duty will be payable on any transfer of ADSs of the Company,
provided that the ADSs and any separate instrument of transfer are executed
and retained at all times outside the United Kingdom.
A transfer of shares in the Company in registered form will attract ad valorem
stamp duty generally at the rate of 0.5% of the purchase price of the shares.
There is no charge to ad valorem stamp duty on gifts. On a transfer from
nominee to beneficial owner (the nominee having at all times held the
shares on behalf of the transferee) under which no beneficial interest passes
and which is neither a sale nor in contemplation of a sale, a fixed £5.00 stamp
duty will be payable.
SDRT is generally payable on an unconditional agreement to transfer shares
in the Company in registered form at 0.5% of the amount or value of the
consideration for the transfer but is repayable if, within six years of the date of
the agreement, an instrument transferring the shares is executed or, if the
SDRT has not been paid, the liability to pay the tax (but not necessarily
interest and penalties) would be cancelled. However, an agreement to
transfer the ADSs of the Company will not give rise to SDRT.
Taxation of capital gains
UK taxation
A US holder may be liable for both UK and US tax in respect of a gain on the
disposal of the Company’s shares or ADSs if the US holder is:
•a citizen of the United States resident or ordinarily resident for UK tax
purposes in the United Kingdom;
•a citizen of the United States who has been resident or ordinarily resident
for UK tax purposes in the United Kingdom, ceased to be so resident or
ordinarily resident for a period of less than five years of assessment and who
disposed of the shares or ADSs during that period (a “Temporary Non-
Resident”), unless the shares or ADSs were also acquired during that period,
such liability arising on that individual’s return to the UK;
•a US domestic corporation resident in the United Kingdom by reason of
being centrally managed and controlled in the United Kingdom; or
•a citizen of the United States or a US domestic corporation that carries
on a trade, profession or vocation in the United Kingdom through a branch
or agency or, in the case of US domestic companies, through a permanent
establishment and that has used the shares or ADSs for the purposes of
such trade, profession or vocation or has used, held or acquired the
shares or ADSs for the purposes of such branch or agency or permanent
establishment.
Under the Treaty, capital gains on dispositions of the shares or ADSs are
generally subject to tax only in the country of residence of the relevant
holder as determined under both the laws of the United Kingdom and the
United States and as required by the terms of the Treaty. However, individuals
who are residents of either the United Kingdom or the United States and who
have been residents of the other jurisdiction (the US or the UK, as the case
may be) at any time during the six years immediately preceding the relevant
disposal of shares or ADSs may be subject to tax with respect to capital gains
arising from the dispositions of the shares or ADSs not only in the country of
which the holder is resident at the time of the disposition, but also in that
other country (although, in respect of UK taxation, generally only to the
extent that such an individual comprises a Temporary Non-Resident).
US federal income taxation
A US holder that sells or otherwise disposes of the Company’s shares or ADSs
will recognise a capital gain or loss for US federal income tax purposes equal
to the difference between the US dollar value of the amount realised and the
holder’s tax basis, determined in US dollars, in the shares or ADSs. Generally, a
capital gain of a non-corporate US holder that is recognised before 1 January
2011 is taxed at a maximum rate of 15%, provided the holder has a holding
period of more than one year. The gain or loss will generally be income or
loss from sources within the United States for foreign tax credit limitation
purposes. The deductibility of losses is subject to limitations.
Additional tax considerations
UK inheritance tax
An individual who is domiciled in the United States (for the purposes of the
Estate Tax Convention) and is not a UK national will not be subject to UK
inheritance tax in respect of the Company’s shares or ADSs on the individual’s
death or on a transfer of the shares or ADSs during the individual’s lifetime,
provided that any applicable US federal gift or estate tax is paid, unless the
shares or ADSs are part of the business property of a UK permanent
establishment or pertain to a UK fixed base used for the performance of
independent personal services. Where the shares or ADSs have been placed
in trust by a settlor, they may be subject to UK inheritance tax unless, when
the trust was created, the settlor was domiciled in the United States and was
not a UK national. Where the shares or ADSs are subject to both UK
inheritance tax and to US federal gift or estate tax, the Estate Tax Convention
generally provides a credit against US federal tax liabilities for UK inheritance
tax paid.