Unilever 2004 Annual Report Download - page 183

180 Unilever Annual Report and Accounts 2004
Taxation for US residents holding shares in PLC
The following notes are provided for guidance. US residents
should consult their local tax advisers, particularly in connection
with potential liability to pay US taxes on disposal, lifetime gift
or bequest of their shares.
United Kingdom taxation on dividends
Under United Kingdom law, income tax is not withheld from
dividends paid by United Kingdom companies. Shareholders,
whether resident in the United Kingdom or not, receive the full
amount of the dividend actually declared.
United States taxation on dividends
If you are a shareholder resident in the US, the dividend up to the
amount of our earnings and profits for United States Federal
income tax purposes will be ordinary dividend income. Dividends
received by an individual during taxable years before 2009 will be
taxed at a maximum rate of 15%, provided the individual has
held the shares for more than 60 days during the 121-day period
beginning 60 days before the ex-dividend date, that PLC is a
qualified foreign corporation and certain other conditions are
satisfied. PLC is a qualified foreign corporation for this purpose.
Dividends received by an individual for taxable years after 2008
will be subject to tax at ordinary income rates. The dividend is
not eligible for the dividends received deduction allowable to
corporations. The dividend is foreign source income for US
foreign tax credit purposes.
Any portion of the dividend that exceeds our United States
earnings and profits is subject to different rules. This portion is a
tax free return of capital to the extent of your basis in our shares,
and thereafter is treated as a gain on a disposition of the shares.
UK taxation on capital gains
Under United Kingdom law, when you sell shares you may be
liable to pay capital gains tax. However, if you are either:
• an individual who is neither resident nor ordinarily resident in
the United Kingdom; or
• a company which is not resident in the United Kingdom;
you will not be liable to United Kingdom tax on any capital gains
made on disposal of your shares.
The exception is if the shares are held in connection with a trade
or business which is conducted in the United Kingdom through
a branch or an agency.
UK inheritance tax
Under the current estate and gift tax convention between the
United States and the United Kingdom, ordinary shares held by
an individual shareholder who is:
• domiciled for the purposes of the convention in the United
States; and
• is not for the purposes of the convention a national of the
United Kingdom;
will not be subject to United Kingdom inheritance tax on:
•the individual’s death; or
• on a gift of the shares during the individual’s lifetime.
The exception is if the shares are part of the business property
of a permanent establishment of the individual in the United
Kingdom or, in the case of a shareholder who performs
independent personal services, pertain to a fixed base situated
in the United Kingdom.