FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
the Securities Exchange Act of 1934
For the month of April, 2008
HSBC Holdings plc
42nd Floor, 8 Canada
Square, London E14 5HQ, England
(Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F).
Form 20-F X Form 40-F ......
(Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934).
Yes....... No X
(If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82- ..............)
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in
any doubt about this document or as to the action you should take, you should
consult a stockbroker, solicitor, accountant or other appropriate independent
professional adviser.
If you sold or transferred all or some of your ordinary shares on or before 18
March 2008, but those shares are included in the number shown in box 1 on your
Form of Election, Entitlement Advice or Dividend Notification email for the
fourth interim dividend for 2007, 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.
The Stock Exchange of Hong Kong Limited takes no responsibility for the contents
of this document, makes no representation as to its accuracy or completeness and
expressly disclaims any liability whatsoever for any loss howsoever arising from
or in reliance upon the whole or any part of the contents of this document. The
ordinary shares of HSBC Holdings plc trade under stock code 5 on The Stock
Exchange of Hong Kong.
3 April 2008
Dear Shareholder
SCRIP DIVIDEND SCHEME AND PAYMENT OF DIVIDENDS IN UNITED STATES DOLLARS,
STERLING OR HONG KONG DOLLARS
On 3 March 2008, your Directors declared a fourth interim dividend for 2007 of
US$0.39 per ordinary share, payable on 7 May 2008. You may elect to receive:
1. a scrip dividend of new shares at a 'Market Value' of US$16.4022 (GBP8.132)
per share;
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 exchange rates on 27 March 2008, the fourth interim
dividend in sterling and Hong Kong dollars would have been approximately
GBP0.193 and HK$3.0338. The precise amounts which will be payable per ordinary
share in either sterling or Hong Kong dollars on 7 May 2008 will be converted
from United States dollars using the exchange rates on 28 April 2008 as
explained on page 2. Please read this letter carefully.
In the absence of other instructions the dividend will be paid to you as
described below. If you wish 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 24 April 2008. As an alternative to returning a printed Form of
Election to make an election or writing to the Registrars to revoke a standing
election, you may give instructions electronically through the Registrars'
Investor Centre, at the appropriate website address given on page 8.
Instructions must be received by close of business on 24 April 2008. Before
giving instructions electronically you will need to register with the Investor
Centre and you should do so without delay, in order to give your instructions by
the deadline date. The use of Investor Centre to give your dividend instructions
to the Registrars is referred to throughout this document as giving an
Electronic Instruction. If you have provided an email address to receive
electronic communications from HSBC we will send you 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 printed Form of Election until such
time as you register with the Registrars' Investor Centre so that you can give
your instructions electronically.
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 action if you wish to receive the number of new
shares shown on the Entitlement Advice. If you do not wish to receive the
maximum entitlement to new shares, a letter revoking your standing
instructions or an Electronic Instruction must be received by the
appropriate Registrars, at the address given on page 8, by close of
business on 24 April 2008. If you wish to receive new shares in respect of
only part of this dividend, or if you wish to receive your cash dividend in
any combination of United States dollars, sterling and Hong Kong dollars,
please ask the Registrars for a Form of Election in time to return it to
them by close of business on 24 April 2008, or give 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 receive new shares
in lieu of the cash dividend, you should either complete and sign a printed
Form of Election and return it to the appropriate Registrars at the address
given on page 8, or give an Electronic Instruction, by close of business on
24 April 2008. If you take no action, you will receive the dividend in cash
in the currency indicated on your Form of Election and/or Dividend
Notification email.
We will calculate your entitlement to new shares using a 'Market Value' of
US$16.4022 (GBP8.132) 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 dividend alternative will enable shareholders to increase their
holdings of shares without incurring dealing costs or stamp duty. However,
the scrip dividend on shares held through the American Depositary Receipt
programme or Euroclear France, the settlement and central depositary system
in France, will be subject to Stamp Duty Reserve Tax, currently 1.5 per
cent of the Market Value. To the extent that shareholders elect to receive
new shares, the Company will benefit by 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 provides a general outline of
the tax considerations in the United Kingdom and overseas.
Please read the next section regarding the payment of dividends in cash,
even if you wish to receive your dividend in the form of new shares.
2. Cash dividend
If your shares were recorded on the Principal Register at close of business
on 25 March 2008, you will automatically receive any dividends payable to
you in cash in sterling, unless you have previously elected to receive
payment in United States 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 recorded on the Hong Kong Overseas Branch Register at
close of business on 25 March 2008, you will automatically receive any
dividends payable 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 recorded on the Bermuda Overseas Branch Register at
close of business on 25 March 2008, 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.
The currency in which any dividends payable to you in cash are to be paid
is stated on your Form of Election, Entitlement Advice or Dividend
Notification email. If you wish to give standing instructions to receive
such dividends in one of the other available currencies (United States
dollars, sterling or Hong Kong dollars), you should either complete the One
Currency Election on page 2 of the Form of Election or Entitlement Advice,
or give an Electronic Instruction. Completion of the One Currency Election
on the reverse of a printed Form of Election or Entitlement Advice will not
revoke a 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 receive this dividend in a combination of the available
currencies or in a combination of cash and new shares, you must either
complete Section B on page 1 of the Form of Election or give an Electronic
Instruction. If you have received an Entitlement Advice and not a printed
Form of Election and you wish to receive your 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 8 to revoke your standing instructions for scrip
dividends and to request a Form of Election in time to return it to them by
close of business on 24 April 2008, or give an Electronic Instruction by
this time.
Dividends payable in sterling or Hong Kong dollars on 7 May 2008 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 28 April 2008. The exchange
rates will 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 on or about
7 May 2008.
Whether you elect to receive your dividends in cash or in shares, it is
recommended that you provide payment instructions either through the Registrars'
Investor Centre or by completing and returning the Dividend Payment Instruction
on page 2 of the printed Form of Election or Entitlement Advice, so that any
dividends payable to 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 dividends to be sent direct to your bank
account and you do not wish to change those instructions.
Yours sincerely
R G Barber
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 2007 for a further five-year period, will apply in
respect of the fourth interim dividend for 2007. Holders of ordinary shares
on the Principal Register as at the close of business in England on 25
March 2008 or on the Hong Kong Overseas Branch Register as at the close of
business in Hong Kong on 25 March 2008 or on the Bermuda Overseas Branch
Register as at the close of business in Bermuda on 25 March 2008 (other
than those shareholders referred to below) will be able to elect to receive
new shares in respect of all or part of their holdings of shares (see
paragraph 3 below) as an alternative to receiving the fourth interim
dividend for 2007 of US$0.39 per share in cash. The new ordinary shares
will be issued subject to the Memorandum and Articles of Association of the
Company and will rank equally with the existing issued ordinary shares in
all respects.
2. Market Value
The 'Market Value' is the average of the middle market quotations for the
ordinary shares on the London Stock Exchange, as derived from the Daily
Official List, for the five business days beginning on 19 March 2008 (the
day on which the shares were first quoted ex-dividend). Since the dividend
is declared in United States dollars, the average of the middle market
quotations of GBP8.132 was then converted into United States dollars using
the exchange rate quoted by HSBC Bank plc in London at 11.00 am on 27 March
2008, giving the Market Value of US$16.4022 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$16.4022 per
share;
(b) the cash dividend of US$0.39 per share; and
(c) the number of shares held by you on 25 March 2008 ('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
residual dividend entitlement brought forward = maximum dividend available
for share election
Maximum dividend available = maximum number of new shares (rounded down to the nearest whole number)
--------------------------
Market Value
You may elect to receive new shares in respect of 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).
If you elect to receive only part of your dividend as new shares, you will
receive the balance in cash. Any residual dividend entitlement relating to
that portion of your holding in respect of which you have elected to
receive a scrip dividend of new shares will be carried forward in United
States dollars (without interest) to the next dividend (see Example 2).
If you wish to receive a specific number of new shares, you may calculate
the number of existing shares 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
------------------------------------------------------- (rounded up to the nearest whole number)
Cash dividend of US$0.39 per share
Example 1
If you have 1,000 ordinary shares, your maximum entitlement will be
calculated as follows:
Your cash dividend (1,000 x? US$0.39) US$ 390.00
Plus residual dividend entitlement brought forward (say) US$ 4.00
-------------------------
Maximum dividend available US$ 394.00
=========================
US$394.00
Number of new shares = ---------- = 24.0212 = 24 new shares
US$16.4022
Total Market Value of 24 new shares = 24 x US$16.4022 US$ 393.66
Plus residual dividend entitlement carried forward (US$394.00 - US$393.66) US$ 0.34
-------------------------
US$ 394.00
=========================
Example 2
If you have 1,000 ordinary shares and a residual dividend entitlement
brought forward of, say, US$4.00, your maximum entitlement will be 24 new
shares, as shown in Example 1. Should you wish to elect for new shares on
only 500 of your existing 1,000 ordinary shares, you should insert the
number 500 in the box in Section B (i) of the printed Form of Election or,
if giving an Electronic Instruction in the relevant box in the Registrars'
Investor Centre. The election for new shares and cash balance due to you
would then be calculated as follows:
Your cash dividend (1,000 x US$0.39) US$ 390.00
Plus residual dividend entitlement brought forward (say) US$ 4.00
-------------------------
Maximum dividend available US$ 394.00
-------------------------
500 existing shares on which you wish to receive new shares (500 x US$0.39) US$ 195.00
Plus residual dividend entitlement brought forward (say) US$ 4.00
-------------------------
Total available to elect for new shares US$ 199.00
-------------------------
US$199.00
Number of new shares = ---------- = 12.133 = 12 new shares
US$16.4022
Total Market Value of12new shares = 12 x US$16.4022 US$ 196.83
Plus residual entitlement to be carried forward to next dividend (US$199.00-US$196.83) US$ 2.17
Plus balance of maximum dividend available to be paid in cash (US$394.00-US$199.00) US$ 195.00
-------------------------
Maximum dividend available US$ 394.00
-------------------------
In addition to the 12 new ordinary shares, you will receive a cash balance
of US$195.00 and US$2.17 will be carried forward in United States dollars
(without interest) to your next dividend. The cash balance will be paid to
you in the currency indicated in box 4 on the Form of Election or Dividend
Notification email, unless you give instructions to the contrary by
indicating the currency/currencies you wish to receive in the boxes in
sections B (ii) to B (iv) of the printed Form 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 below.
------------------------------------------------------------------------------------------------------------------------------
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 ordinary shares shown in box 1 above, as follows:
------------------
in shares (i) Number of shares on which I wish to receive new shares 500 shares
------------------
in cash (ii) Number of shares on which I wish to receive cash in sterling GBP 167 shares
------------------
(iii) Number of shares on which I wish to receive cash in US USD 167 shares
dollars ------------------
(iv) Number of shares on which I wish to receive cash in Hong Kong HKD 166 shares
dollars ------------------
Total number of existing shares (the sum of (i) to (iv)) 1000 shares
------------------
------------------------------------------------------------------------------------------------------------------------------
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 standing instructions 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 smaller number of new shares. If
you do not formally revoke your standing instructions by 24 April
2008, you will receive the number of new ordinary shares shown in box
4 on the Entitlement Advice.
If you do not wish to receive new shares, a letter revoking the standing
instructions to receive scrip dividends must be received by the
Registrars at the appropriate address given on the Entitlement Advice,
or an Electronic Instruction must be received, by close of business on
24 April 2008. A cash dividend will then be paid on your entire
holding in the currency shown in box 6 on the Entitlement Advice. If,
however, you wish to receive new shares in respect of only part of
this dividend, or if you wish to receive any dividend payable to 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 24 April 2008. In any event, if
you revoke your standing instructions you will receive, for any future
dividends to which the Scheme applies, a printed Form of Election
and/or Dividend Notification email and, if you register with Investor
Centre, you will be able to give an Electronic Instruction.
(b) If you have not previously given standing instructions to receive new
shares under the Scheme and you wish to receive new shares in lieu of
a cash dividend on this occasion only, an election to participate in
the Scheme must 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 shares for this
dividend, you may do so by inserting a 'X' in the box in Section A (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 should
complete 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 7 May 2008, a printed 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 Electronic Instruction must
be received, by close of business on 24 April 2008.
(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 this and for subsequent
dividends to which the Scheme applies, you may do so by inserting a
'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 7 May 2008, 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
Electronic Instruction must be received, by close of business on 24
April 2008.
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 fourth interim dividend for 2007 payable on 7 May 2008 and
for subsequent dividends. Your standing instructions may be revoked by
giving signed notice in writing to the appropriate Registrars or by
giving an Electronic Instruction on or before the final date for
receipt of printed Forms of Election or Electronic Instructions in
respect of that dividend. Your standing instructions will lapse
automatically if at any time you cease to hold any ordinary shares.
ON THE ASSUMPTION THAT NO RESIDUAL DIVIDEND ENTITLEMENT IS BROUGHT
FORWARD, SHAREHOLDERS WITH A HOLDING AS AT 25 MARCH 2008 OF FEWER THAN
43 ORDINARY SHARES WHO HAVE GIVEN STANDING INSTRUCTIONS TO RECEIVE
SCRIP DIVIDENDS, AND SHAREHOLDERS WHO GIVE AN ELECTION TO RECEIVE
SCRIP DIVIDENDS ON FEWER THAN 43 ORDINARY SHARES, WILL NOT RECEIVE ANY
NEW SHARES ON THIS OCCASION AND WILL HAVE THEIR DIVIDEND ENTITLEMENT
RELATING TO THOSE SHARES CARRIED FORWARD IN UNITED STATES DOLLARS
(WITHOUT INTEREST) AS DESCRIBED ON PAGE 1.
6. Overseas shareholders
No person receiving a copy of this document or a Form of Election 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 governmental or regulatory procedures or any similar
formalities. It is the responsibility of any person outside the UK and Hong
Kong who wishes to receive new shares under the Scheme to comply with the
laws of the relevant jurisdiction(s), including the obtaining of any
governmental or 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 scrip dividend shares allotted to them
must ensure that the first trade of their scrip dividend 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 Authority and 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 permission to deal in, the new shares, and to the New York, Paris and
Bermuda stock exchanges for listing of the new shares.
Existing ordinary shares 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 7 May 2008, 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 in
uncertificated 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 7 May 2008.
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 7 May
2008.
8. If you have sold or transferred your shares
If you sold or transferred all or some of your ordinary shares on or before
18 March 2008 (the date on which the shares eligible for the fourth interim
dividend for 2007 were last quoted cum-dividend on the London, Hong Kong
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 fourth interim dividend for 2007,
approximately 282,175,003 new shares would be issued, representing an
increase of 2.38 per cent in the issued ordinary share capital of the
Company as at 27 March 2008.
The total cost of the fourth interim dividend for 2007, ignoring any
elections for the scrip alternative, is approximately US$4,628 million. The
applicable tax credit is the sterling equivalent of approximately US$514
million.
Whether or not it is to your advantage to elect to receive new ordinary
shares in lieu of a cash dividend or to elect to receive payment in United
States dollars, sterling or Hong Kong dollars is a matter for individual
decision by each shareholder. HSBC Holdings cannot accept any
responsibility for your decision. The effect on the tax position of 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.
No acknowledgement of receipt of a printed Form of Election will 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 at close of business on 25 March 2008
- number of new ordinary shares allotted
- total dividend payable
- residual dividend entitlement (if any) brought forward from previous
dividend
- residual dividend entitlement (if any) carried forward to the next
dividend
- cash equivalent of the new shares allotted
- 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 following is a general
outline of the tax consequences in the UK and overseas, based on current
law and practice, and takes into account some tax changes previously
announced which are effective from 6 April 2008.
No tax is currently withheld from dividends paid by the Company. Such
dividends carry a tax credit equal to one-ninth of the dividend.
(i) Cash dividends
UK resident individuals
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 US$10 and as having paid
income tax equal to the sterling equivalent of US$10 (the associated
tax credit).
Individual shareholders who are liable to income tax at the basic rate
only will have no further tax to pay, as the tax liability will 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 will
be liable to tax at a rate of 32.5 per cent on the aggregate of the
dividend and the associated tax credit. For example, if a higher rate
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. 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
equivalent of US$22.50.
UK resident trustees
Trustees of discretionary trusts, which are usually liable to pay
income tax at the rate of 40 per cent, may be required to account for
additional tax on UK dividend income at 32.5 per cent of the aggregate
amount of dividend received and the associated tax credit, against
which the effective 10 per cent tax credit may be offset.
UK resident companies
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 resident gross 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.
Non-UK residents
Generally, non-UK residents will 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 special rules which apply to non-UK resident discretionary
trusts in receipt of UK dividends.
(ii) Scrip dividends
UK resident individuals
The tax consequences of electing to receive new shares in lieu of a
dividend are similar to those of receiving cash dividends.
Individual shareholders who elect to receive new shares in lieu of a
cash dividend will be treated as having received income of an amount
which, when reduced by income tax at the savings rate (currently 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. Individual shareholders liable
to tax at the higher rate will be liable to pay additional tax at the
rate of 22.5 per cent of the aggregate of the cash equivalent and
associated tax credit (which equates to the sterling equivalent of
US$22.50 in the example above).
For income tax purposes, HM 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
separate holding. 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 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 32.5 per cent being partially offset
by the effective 10 per cent tax credit).
UK resident companies
Corporate shareholders will not be liable to corporation tax on the
receipt of new shares. For capital gains tax purposes the base cost of
these shares will be nil.
UK resident gross 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.
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 the
savings rate (currently 10 per cent) is equal to the 'cash equivalent'
which would have been received had they not elected 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 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 new shares.
Residual dividend entitlement
Under current legislation, a UK resident shareholder will not be
subject to UK tax on any amount carried forward as a residual dividend
entitlement until either a new share or cash is received. The tax
treatment of the new ordinary share will be the same as that of any
other new ordinary share issued at the same time as a scrip dividend.
Any payment in cash will be taxed as a cash dividend.
Timetable of events
-------------------------------------------------------------------------------------------------------------------------
Ordinary shares quoted ex-dividend in London, Hong Kong and Bermuda 19 March 2008
-------------------------------------------------------------------------------------------------------------------------
American Depositary Shares quoted ex-dividend in New York 20 March 2008
-------------------------------------------------------------------------------------------------------------------------
Record date for the fourth interim dividend for 2007 25 March 2008
-------------------------------------------------------------------------------------------------------------------------
Ordinary shares quoted ex-dividend in Paris 26 March 2008
-------------------------------------------------------------------------------------------------------------------------
FINAL DATE FOR RECEIPT BY REGISTRARS OF FORMS OF ELECTION, 24 April 2008
REVOCATIONS OF STANDING INSTRUCTIONS FOR SCRIP DIVIDENDS
AND ELECTRONIC INSTRUCTIONS
-------------------------------------------------------------------------------------------------------------------------
Exchange rate determined for payment of dividends in sterling and Hong Kong dollars 28 April 2008
-------------------------------------------------------------------------------------------------------------------------
Payment date - dividend warrants mailed; new share certificates or Bermuda Overseas Branch 7 May 2008
Register Transaction Advices and Notional Tax Vouchers mailed; shares credited to stock
accounts in CREST
-------------------------------------------------------------------------------------------------------------------------
Expected first day of dealings in new shares in London, Hong Kong, Paris and Bermuda;
and in American Depositary Shares in New York 7 May 2008
-------------------------------------------------------------------------------------------------------------------------
Shareholders may at any time choose to receive corporate 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 such notifications by email, go to www.hsbc.com/ecomms. 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
corporate communications in printed form, please write to the appropriate
Registrars at the address given below. Printed copies will be provided without
charge. Further copies of this letter, replacement Forms of Election and a
Chinese translation of this and future documents may be obtained from the
Registrars.
Principal Register Hong Kong Overseas Branch Register
Computershare Investor Services PLC Computershare Hong Kong Investor Services Limited
PO Box 1064 Hopewell Centre
The Pavilions Rooms 1806-1807, 18th Floor
Bridgwater Road 183 Queen's Road East
Bristol Hong Kong
BS99 3FA Telephone: 2862 8555
United Kingdom Email: hkinfo@computershare.com.hk
Telephone: (44) 0870 702 0137 Investor Centre: www.computershare.com/hk/investors
Email: web.queries@computershare.co.uk
Investor Centre: www.computershare.com/investor/uk
Bermuda Overseas Branch Register US Shareholder helpline
Corporate Shareholder Services Telephone: 1 866 299 4242
The Bank of Bermuda Limited
6 Front Street
Hamilton HM 11
Bermuda
Telephone: 299 6737
Investor Centre: www.computershare.com/investor/uk
If you have been nominated to receive general shareholder communications
directly from HSBC Holdings it is important to remember that your main contact
in terms of your investment remains as it was (so the registered shareholder, or
perhaps custodian or broker, who administers the investment on your behalf).
Therefore any changes or queries relating to your personal details and holding
(including any administration thereof) must continue to be directed to your
existing contact at your investment manager or custodian. The Registrars cannot
guarantee dealing with matters that are directed to them in error.
Within this document the Hong Kong Special Administrative Region of the People's
Republic of China has been referred to as 'Hong Kong'.
The Directors of HSBC Holdings plc are S K Green, Baroness Dunn*, Sir Brian
Moffat*, M F Geoghegan, Lord Butler*, V H C Cheng, J D Coombe+, J L Duran+, R A
Fairhead+, D J Flint, W K L Fung*, J W J Hughes-Hallett+, W S H Laidlaw+, Sir
Mark Moody-Stuart+, G Morgan+, S W Newton+, S M Robertson+ and Sir Brian
Williamsonv.
* Non-executive Director
+ Independent non-executive Director
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
HSBC Holdings plc
By:
Name: P A Stafford
Title: Assistant Group Secretary
Date: 03 April 2008