Scrip dividend scheme
Terms and conditions
This document is important and requires
your immediate attention.
If you are in any doubt about the action
you should take with this document,
you should immediately consult an
appropriate independent adviser duly
authorised under the United Kingdom
Financial Services and Markets Act
2000. If you have sold or transferred all
of your shares in Standard Life plc, you
should contact your stockbroker or agent
without delay for advice as to how you
should proceed.
The information regarding taxation
provided at the back of these terms and
conditions is provided for information
purposes only and is based on Standard Life
plc’s understanding of the law and practice
in force as at 24 March 2009, the latest
practicable date before the printing and
publication of this document. It does not
form part of these terms and conditions.
Standard Life will not be obliged to
update this information.
1. What is the Standard Life Scrip
dividend scheme?
The Scrip dividend scheme enables eligible
holders of our ordinary shares to receive new
ordinary shares instead of the cash dividends
they would otherwise receive. This means
that you can build up your shareholding in
Standard Life without going to the market to
buy new shares if you are eligible to participate.
As a result, you will not incur any dealing
costs or stamp duty. At the same time, we will
retain more cash in our business, which would
otherwise be paid as a dividend.
Our Scrip dividend scheme is available to
eligible holders of our ordinary shares who
hold their shares directly by having them
registered in their own names as well as those
who hold their shares through the Standard Life
Share Account.
Please note that the introduction of our Scrip
dividend scheme depends on us receiving the
necessary shareholder approvals at our Annual
General Meeting in 2009 (“AGM”). These terms
and conditions have been adopted by our
Directors to deal with various technical matters
relating to the detailed operation of the Scrip
dividend scheme proposed at the AGM.
The Scrip dividend scheme applies to your
entire shareholding in respect of each dividend
for which a Scrip dividend alternative is
offered, subject to the exceptions set out
below. For administrative reasons, you cannot
normally elect to receive shares for only part of
your dividend.
2. Will our Scrip dividend scheme apply
to the proposed 2008 final dividend?
We intend to have the Scrip dividend
scheme in place for the final dividend
payable on 29 May 2009 – assuming all of
the arrangements for it are approved by
shareholders at our AGM.
3. What do I have to do to join the Scrip
dividend scheme?
If you are in the Standard Life plc dividend
reinvestment plan
You do not have to do anything else if you are
a participant in the Standard Life plc dividend
reinvestment plan at the end of 13 May 2009.
We recognise that you have already made clear
that you want to receive shares instead of your
cash dividends. So, as part of our ongoing
commitment to shareholder service, we are
proposing a special resolution at our AGM to
Standard Life
1
allow participants in the dividend reinvestment
plan to be treated as having elected to
participate in our Scrip dividend scheme on the
basis of these terms and conditions – without
having to sign a Scrip dividend form.
For the convenience of those of you who hold
your shares through the Standard Life Share
Account (SLSA), we are also making arrangements
for similar changes to be made to the SLSA terms
and conditions to help make clear that you can
participate in our Scrip dividend scheme without
having to sign a Scrip dividend form – if you are
a participant in the Standard Life plc dividend
reinvestment plan at the end of 13 May 2009.
Of course, you are entitled to opt out of
these arrangements and not participate in our
Scrip dividend scheme, or withdraw from it,
and can do so by visiting our website at
www.standardlife.com/shareholders or by
calling us using the number(s) attached at the
end of these terms and conditions. This applies
whether your shares are registered in your
own name or held in the Standard Life Share
Account. You need to do this before the deadline
if you want to receive a cash payment for the
proposed 2008 final dividend – no later than
midnight (UK time) at the end of 13 May 2009.
If you are not in the Standard Life plc
dividend reinvestment plan
To participate in the Scrip dividend scheme
please complete the Scrip dividend form and
return it to us at Standard Life plc, PO Box 471,
Beckenham, BR3 9ED, United Kingdom if you
are eligible to participate. No acknowledgement
of receipt will be sent. Alternatively, you may
participate in the scheme online at
www.standardlife.com/shareholders
Please note: any Scrip dividend form which is
sent to us at a different address from that stated
in this paragraph 3 will not be accepted by us
or considered as valid. This will not apply to
Scrip dividend forms returned using the replypaid envelope included with the documents
sent to you in connection with the 2009 AGM,
provided that we receive such forms in that
envelope no later than 30 June 2009.
2
Standard Life
If you have a joint holding, please ensure that
all holders sign the Scrip dividend form. In the
case of a corporation, the Scrip dividend form
should be executed under the common seal of
the company or otherwise validly executed by
it, or signed by a duly authorised official of the
company whose capacity should be stated.
You can participate in the Scrip dividend scheme
at any time by completing the Scrip dividend
form. However, if your completed Scrip dividend
form is not received before midnight (UK time)
on the date which is 15 working days before a
dividend payment date, it will not be valid for
that particular dividend and you will only receive
new ordinary shares for subsequent dividends
in respect of which a Scrip dividend alternative
is offered. For details of the deadline date for
submitting a Scrip dividend form in respect of
any interim or final dividend, please refer to our
website at www.standardlife.com/shareholders
The period of 15 working days referred to above
will not apply in relation to the proposed final
dividend for 2008, payable on 29 May 2009.
The deadline for completed Scrip dividend
forms to be received in relation to that
dividend is midnight (UK time) at the end of
13 May 2009.
We and our registrar reserve the right to treat
as valid a Scrip dividend form which is not
complete in all respects.
4. Can I participate in the Scrip
dividend scheme in respect of shares
which I hold in the Standard Life
(Employee) Share Plan?
No. You can only participate in the Scrip
dividend scheme in respect of ordinary shares
which you hold in your own name or in the
Standard Life Share Account.
The Standard Life (Employee) Share Plan
operates independently of the Scrip dividend
scheme and will continue to do so.
5. What is to happen to the dividend
reinvestment plan?
As this Scrip dividend scheme is intended
to replace the Standard Life plc dividend
reinvestment plan, we are arranging for the
dividend reinvestment plan to be terminated
before the proposed payment of the 2008
final dividend on 29 May 2009. However, the
right is reserved not to terminate the dividend
reinvestment plan if the resolutions proposed in
connection with the Scrip dividend scheme are
not approved by shareholders at our AGM.
6. How will you calculate my
entitlement to shares in the Scrip
dividend scheme?
Your entitlement to new ordinary shares is
calculated by taking the amount of cash dividend
to which you are entitled (plus any fractional
entitlement carried forward from the last dividend*)
and dividing it by the Scrip reference price.
(
Number of ordinary
shares held at the
dividend record date
x
Our articles of association provide that the Scrip
reference price will be calculated by reference
to the average of the middle market quotations
for our ordinary shares for the five consecutive
business days determined by our Directors
commencing on or after the ex-dividend date
(as notified on the Standard Life plc website) as
derived from the Daily Official List of the London
Stock Exchange plc. The Scrip reference price
will be notified on the Standard Life website
at www.standardlife.com/shareholders
Shareholders may approve a different pricing
basis in the future.
The value of your entitlement will be subject
to rounding to ensure that it is, as nearly as
possible, equal to but not greater than the cash
amount of the cash dividend (disregarding any
tax credit).
The formula used in calculating your
entitlement of shares is, therefore, as follows:
)
Cash dividend per share
+
Any fractional
entitlement carried
forward from last dividend*
Scrip reference price
An example, for illustrative purposes only, is as follows:
The cash dividend is 7.70 pence per ordinary share, there is no fractional entitlement being carried
forward, your shareholding is 1,000 ordinary shares, and the Scrip reference price is £1.84.
• Value of cash dividend: 1,000 x 7.70p = £77
• Number of new shares: £77 ÷ £1.84 = 41.85, rounded down to 41 shares.
• V
alue of new shares: 41 x £1.84 = £75.44, leaving an amount equal to £1.56 which would be
carried forward to the next dividend payment as described in paragraphs 7 and 8.
* Please note: no fractional entitlements will be available for inclusion in respect of the first
dividend for which you participate in the Scrip dividend scheme. See paragraphs 7 and 8 for
further details on fractional entitlements.
Standard Life
3
7. What will you do with any
cash balance?
9. How will I know that any new shares
have been allotted?
No fraction of a new ordinary share will be
allotted and any cash balance will be carried
forward, without interest, and included in the
calculation for the next dividend payment.
Dealings in the new ordinary shares issued as
part of our Scrip dividend scheme are expected
to begin on the dividend payment date. In the
unlikely event that the UK Listing Authority
does not agree before the dividend payment
date to admit the new ordinary shares to the
Official List, your participation in the relevant
Scrip dividend alternative will be disregarded
and the dividend will be paid in cash as soon as
reasonably practicable.
8. Are my new Scrip dividend
shares included in the next cash
or Scrip dividend?
All new ordinary shares issued as a Scrip
dividend will automatically increase your
shareholding on which the next entitlement to
a cash or Scrip dividend will be calculated.
Where you are a participant in our Scrip
dividend scheme and you hold fewer than the
minimum number of ordinary shares required
for you to receive at least one new share by way
of Scrip dividend, an amount representing your
fractional entitlement will be accumulated,
without interest, for your benefit. These funds
will be added to the cash amount of any
subsequent dividends (in respect of which a
Scrip dividend alternative is made available) and
applied in calculating your entitlement under
that Scrip dividend alternative if you remain a
participant in our Scrip dividend scheme.
An amount equal to the value of accumulated
fractional entitlements of £3 or more will
be paid to you (or, where appropriate, your
beneficiaries) within three months if you cancel
your participation in our Scrip dividend scheme
or dispose of your entire shareholding, or after
receipt of notice of your death, or where our
Directors exercise their right to withdraw this
Scrip dividend scheme in its entirety or, at our
discretion, at the time of our next dividend
payment. If your participation is cancelled
or deemed to be cancelled in any of the
circumstances described in this paragraph and
the amount due to you in respect of fractional
entitlements accumulated on your behalf is
£2.99 or less, such amount will be retained and
donated to a charity selected by us.
4
Standard Life
Once your new shares have been allotted,
you will be given notice of the number of new
ordinary shares allotted, the Scrip reference price,
and the total cash equivalent of the new ordinary
shares for tax purposes. Such notice may be
provided to you in paper form or, if you have
chosen, or are deemed to have chosen, to receive
communications in electronic form, you may be
notified by letter and/or email that the information
is available online for you to view and/or download.
10. Will I be sent a new share certificate,
Standard Life Share Account update or
CREST message?
Shareholders with a certificate or CREST holding
Your new share certificate will be posted to
you at your own risk on or about the same date
as the cash dividends are paid if you are the
registered holder of your shares and they are
not held in uncertificated form through CREST.
Please see our website for current dates.
In the case of shareholders who hold their existing
shares in uncertificated form through CREST on
the particular dividend record date, their CREST
account will be credited electronically on the day
of the dividend payment date unless the Company
is unable to do so under the provisions of the
Uncertificated Securities Regulations 2001 or the
facilities and requirements of CREST, in which
case such shares will be issued in certificated
form and share certificates will be posted.
Standard Life Share Account (SLSA) holders
You will be given notification regarding your
new shares in line with paragraph 9 above.
11. Can I participate in the Scrip
dividend scheme if I am resident
outside the UK, Canada, the Republic
of Ireland, Germany and Austria?
If you are resident outside the UK, Canada, the
Republic of Ireland, Germany or Austria, you
may treat this letter as an invitation to receive
new ordinary shares unless such an invitation
could not lawfully be made to you without
compliance with any registration or other
legal requirements. It is the responsibility of
any person resident outside the UK, Canada,
the Republic of Ireland, Germany and Austria
wishing to elect to receive new ordinary shares
to be satisfied as to full observance of the laws
of the relevant territory, including obtaining
any government or other consents which may
be required and observing any other formalities
in such territories.
Please note that our shares are only listed on the
London Stock Exchange.
12. Will my new shares have the same
voting rights as my existing shares?
Yes, the new ordinary shares will carry the same
voting rights as your existing ordinary shares.
13. Does the Scrip dividend scheme apply
to all my holdings and joint holdings?
Yes, the Scrip dividend scheme will normally
apply to all your holdings. However, if your
shares are registered in more than one holding,
the holdings will be treated for all purposes
as being separate and you would need to
complete separate Scrip dividend forms for
each account, as appropriate.
If you have a joint holding please ensure
that all shareholders sign any required Scrip
dividend forms.
14. What happens if I have recently sold
or purchased ordinary shares?
If you have sold some of your ordinary shares
before a dividend record date the Scrip
dividend alternative will apply in respect of the
remainder of your shares if, and to the extent
that, you are a participant in our Scrip dividend
scheme. If you have bought any additional
ordinary shares after a dividend record date, the
additional shares will not be eligible to receive
the cash or Scrip dividend, but will be eligible
for future dividends. All shares bought after a
dividend record date will be included in future
Scrip dividends if and to the extent that you
are a participant in our Scrip dividend scheme
at the relevant times. If you sell all of your
ordinary shares at any time, you will be deemed
to have cancelled your participation in the
Scrip dividend scheme and any accumulated
fractional entitlements will be dealt with as
described in paragraph 18 below.
15. What is the Scrip dividend form?
This is the form you will generally need to
complete if you wish to participate in our Scrip
dividend scheme.
However, as described in paragraph 3 above,
we are putting in place special arrangements
for participants in the Standard Life plc
dividend reinvestment plan (including for
those of you who hold your shares in the
Standard Life Share Account) in advance of
our proposed final dividend for 2008, payable
on 29 May 2009. See paragraph 21 below for
CREST account holders who wish to participate
in the Scrip dividend scheme.
16. Will my participation in the
Scrip dividend scheme apply to
future dividends?
Your participation will remain valid in respect
of all future Scrip dividends in respect of which
a Scrip dividend alternative is provided unless
and until cancelled by you. However, see
paragraph 21 below for CREST account holders.
Standard Life
5
17. Can I participate in the Scrip dividend
scheme in respect of part of my holding?
No. Participation applies to your total
shareholding for each dividend for which a
Scrip dividend alternative is offered.
We may at our discretion permit partial
elections where a shareholder is acting on
behalf of more than one beneficial owner
(a nominee shareholder).
In addition, see also the special rules that
apply in certain circumstances described in
paragraph 13 and 21.
18. Can I cancel my Scrip
dividend participation?
Yes, you can opt out of or cancel your
participation in the Scrip dividend scheme.
If you are in the Standard Life plc dividend
reinvestment plan
If the first part of paragraph 3 above applies
to you, so that you would be treated as having
elected to participate in our Scrip dividend
scheme, then you are, of course, entitled to opt
out of the arrangements described in paragraph
3 and not participate in our Scrip dividend
scheme, or withdraw from it. You can do so
by visiting our website at www.standardlife.
com/shareholders or by calling us using the
number(s) attached at the end of these terms
and conditions. This applies whether your
shares are registered in your own name or held
in the Standard Life Share Account.
You need to do this before the deadline if
you want to receive a cash payment for the
proposed 2008 final dividend – no later than
midnight (UK time) at the end of 13 May 2009.
If you are not in the Standard Life plc dividend
reinvestment plan or wish to cancel your Scrip
dividend participation for dividends after the
deadline for the 2008 final dividend
Notice of cancellation must be given in writing
and will take effect on its receipt.
If you decide to cancel your participation in
our Scrip dividend scheme, you will generally
receive subsequent dividends in cash. However,
if your letter of cancellation is received after
midnight (UK time) on the date which is
15 working days before a dividend payment
date, it will not be valid for that particular
dividend and you will only receive subsequent
dividends in cash.
The 15 working day deadline referred to above
will not apply in relation to the proposed final
dividend for 2008, payable on 29 May 2009.
The deadline for notices of cancellation to be
received in relation to the 2008 final dividend is
midnight (UK time) at the end of 13 May 2009.
Please note: any notice sent to us at an address
other than that stated in paragraph 3 above
will not be accepted by us or considered valid.
This will not apply to notices sent to us using
the reply-paid envelope included with the
documents sent to you in connection with
the 2009 AGM, provided that we receive such
notices in that envelope no later than 30 June
2009.
In addition, your participation will be deemed
to be cancelled if you sell or otherwise transfer
all of your ordinary shares to another person
but only with effect from the registration
of the relevant transfer. Your participation
will also terminate immediately on receipt
of notice of your death. An amount of £3 or
more in respect of any fractional entitlements
accumulated on your behalf will be paid to
you within three months after cancellation or
deemed cancellation of your participation in
our Scrip dividend scheme or, at our discretion,
at the time of our next dividend payment.
Where the amount is £2.99 or less, such amount
will be retained and donated to a charity
selected by us.
19. Can we change or cancel the terms
of Scrip dividend participation?
Yes, the terms of your participation may be
modified at any time by our Directors pursuant
to the authorisation being sought at the AGM.
In the case of any modification (and unless
otherwise specified by us) you will be
deemed to continue as a participant in our
6
Standard Life
Scrip dividend scheme under the modified
arrangements unless and until we receive a
cancellation notification in writing from you.
Our Directors may, at their discretion, decide
to withdraw the Scrip dividend alternative
in respect of any cash dividend at any time
before the new ordinary shares are allotted. If
the Directors decide to withdraw the offer of a
Scrip dividend alternative, you will receive any
dividend in cash on, or as soon as practicable
after, the relevant dividend payment date.
By way of example, for your protection, our
Directors may withdraw a Scrip dividend
alternative in respect of a particular dividend
and pay a cash dividend instead if, 15 working
days before the dividend payment date, the
middle market quotation for ordinary shares
has fallen by 15% or more from the Scrip
reference price.
21. Does a different procedure apply if I
am a CREST participant?
You can only elect to receive your dividend in
the form of new ordinary shares by means of the
CREST procedures to effect such an election.
No other form of election will be permitted
under this Scrip dividend scheme and, if
received, will be rejected and returned to
the CREST shareholder who has lodged such
instructions. However, see paragraph 3 above
for information on the special arrangements
we intend to put in place for participants in the
Standard Life plc dividend reinvestment plan in
advance of our proposed final dividend for 2008,
payable on 29 May 2009.
If you are a CREST Personal Member, or other
CREST Sponsored Member, you should consult
your CREST sponsor, who will be able to take
appropriate action on your behalf.
The Directors may also, at their discretion,
withdraw this Scrip dividend scheme in
its entirety.
All elections made via the CREST system should
be submitted in accordance with the procedures
as stated in the CREST Reference Manual.
An announcement of any cancellation or
modification to the terms of Scrip dividend
participation will be made on our website at
www.standardlife.com/shareholders
The CREST Reference Manual currently permits
CREST Members to specify whether their
election is relevant for one dividend only or, if
until further notice, it should apply to all future
dividends for which the alternative is available.
20. Will I receive Scrip for every
dividend if I participate?
Investor protection guidelines mean that – if
approved by shareholders – our Scrip dividend
scheme can be in force for an initial period
of up to five years. The operation of the Scrip
dividend scheme is also always subject to
the Directors’ right to withdraw the Scrip
dividend alternative.
If our Directors decide not to provide the
Scrip dividend alternative in respect of any
particular dividend, a cash dividend will be
paid to you in the usual way. If the Directors
do offer a Scrip dividend alternative in respect
of future dividends and you are a participant
in accordance with the terms and conditions
of our Scrip dividend scheme, you will be
provided with a Scrip dividend on the terms
and subject to the conditions of the Scrip
dividend scheme.
Please note that CREST messages should not
be used to change an election in respect of
our Scrip dividend scheme which has not been
made through CREST.
22. What do I do if I need help or have
any questions?
Please contact us at www.standardlife.com or
call us using the number(s) attached at the end
of these terms and conditions.
23. Governing law
This Scrip dividend scheme is made available
on the basis of the relevant provisions of our
memorandum and articles of association and
these terms and conditions adopted by our
Directors in connection with our Scrip dividend
scheme, both as in force from time to time.
For clarity, it is specified that these terms
and conditions are governed by, and shall be
construed in accordance with, Scots law. By
participating in our Scrip dividend scheme
you agree to submit to the jurisdiction of
the Scottish courts in relation to the Scrip
dividend scheme.
Standard Life
7
Taxation
The following information regarding
taxation is based on Standard Life plc’s
understanding of the law and practice in
force in the jurisdictions mentioned below as
at 24 March 2009, the latest practicable date
before the printing and publication of this
document. If you are in any doubt about your
tax position, you should obtain independent
financial advice. Tax legislation can change
from time to time.
United Kingdom taxation
The following information is provided as a
general guide to current UK tax law and to the
current practice of Her Majesty’s Revenue and
Customs (HMRC), both of which are subject to
change at any time, possibly with retrospective
effect. It is not advice. Except where specifically
stated, the information is intended to apply
only to shareholders who are resident (or,
in the case of an individual, domiciled and
resident or ordinarily resident) in the UK for
UK tax purposes, who hold ordinary shares as
investments and who are the absolute beneficial
owners of ordinary shares. The information may
not apply to certain classes of shareholders,
such as dealers in securities, broker-dealers,
insurance companies, collective investment
schemes, and persons who have acquired (or
are deemed for tax purposes to have acquired)
their shares by reason of office or employment.
Shareholders who are in any doubt as to
their tax position or who are resident or
domiciled in or subject to tax in a jurisdiction
other than the UK should consult their
own professional advisers immediately.
Shareholders should consider their tax
position before participating in the Scrip
dividend scheme. Shareholders previously
within the Standard Life plc dividend
reinvestment plan, or shareholders who join
our Scrip dividend scheme, who respectively
do not wish to be in, or to remain in, the
Scrip dividend scheme are referred to the
terms and conditions for details on what
they need to do in order not to participate
in, or continue to participate in, the Scrip
dividend scheme.
8
Standard Life
The UK tax treatment of cash dividends
received by our shareholders will not change
following the implementation of the Scrip
dividend scheme.
Income tax
A shareholder who is an individual resident (for
tax purposes) in the United Kingdom and who
elects to receive new ordinary shares instead of
a cash dividend from us will be subject to tax
on the amount (the “gross amount”) which
is equal to the cash equivalent of those new
ordinary shares grossed up by income tax at the
dividend ordinary rate (currently 10%).
The individual will also be treated as having
paid tax at the rate of 10% on the gross amount
(except to the extent that the individual is
not taxable on the gross amount as a result
of the availability of a relief or allowance). An
individual who, after taking account of their
receipt of new ordinary shares and any cash
dividend, does not pay higher rate income tax
will have no further liability to tax on the receipt
of the new ordinary shares.
To the extent that an individual is, after taking
account of their receipt of new ordinary shares
and any cash dividend, liable to tax at the
higher rate, that individual will pay tax on the
gross amount at the rate of 32.5% less the tax
that individual will be treated as having paid at
the 10% rate.
So, for example, an individual receiving new
ordinary shares with a cash equivalent of
£90 will be treated as having paid tax of £10. If
the individual is not liable to income tax at the
higher rate, that individual’s liability in respect
of the Scrip dividend will be 10% of the gross
amount of £100, or £10. Consequently, that
individual’s liability will be discharged in full
by the tax of £10 which that individual will be
treated as having paid and so that individual
will have no further liability to tax in respect of
the Scrip dividend. If that individual is liable to
income tax at the higher rate, that individual’s
tax liability in respect of the Scrip dividend
will be 32.5% of the gross amount of £100,
or £32.50. After taking into account the tax
of £10 which that individual will be treated as
having paid, this will leave an additional tax
liability of £22.50.
The “cash equivalent” of any new ordinary
shares received in lieu of a cash dividend will
be the amount of the cash dividend foregone
unless the difference between that amount and
the market value of the new ordinary shares
received in lieu of the cash dividend on the first
day of dealing on the London Stock Exchange
is equal to or greater than 15% of that market
value, in which case the cash equivalent will be
that market value.
The UK Government has announced proposals
to introduce, with effect from 6 April 2011, a
new tax rate of 45% for taxable non-savings and
savings income above £150,000. On and after
the date on which the new rate takes effect,
if and to the extent that the gross amount
received by a UK resident individual falls
above the threshold for income tax at the new
45% rate, that individual will be subject to tax
on the gross amount at the rate of 37.5%.
If the new rate of tax is applied in the same way
as the existing rates, that individual would be
able to set off against part of this liability the
tax (at the dividend ordinary rate) that will be
treated as having been paid. Accordingly, to the
extent that the gross amount of the dividend
fell above the threshold for the new 45% rate of
income tax, such an individual would have to
account for additional tax equal to 27.5% of the
gross amount.
Corporation tax
To the extent that a company which is resident
(for tax purposes) in the United Kingdom elects
to receive new ordinary shares instead of a
cash dividend from us, the issue of the new
ordinary shares should not give rise to a charge
to corporation tax. No acquisition cost should
be obtained for the new ordinary shares and,
consequently, the calculation of any chargeable
gain or allowable loss on a future disposal of,
or of part of, that company’s enlarged holding
should fall to be made by reference to the base
cost of the original holding only.
The UK Government has announced its
intention to make changes to the legislation
governing the tax treatment of dividends
received by corporate shareholders. Further
draft legislation is expected to be published.
It is not currently expected that the overall
position for companies as outlined above
should change as a result of any legislation
as finally enacted, although confirmation of
this will only be possible once the details of
the legislation are finalised on the facts of
Standard Life plc’s position.
Stamp duty
No stamp duty or stamp duty reserve tax will
be payable on the receipt of new ordinary
shares under the Scrip dividend scheme.
A UK resident individual shareholder who is
not liable to income tax in respect of the gross
dividend will not be entitled to any payment
from HMRC in respect of any part of the tax that
is deemed to have been paid.
Capital gains tax
A shareholder who is an individual resident (for
tax purposes) in the United Kingdom and who
elects to receive new ordinary shares instead
of a cash dividend from us will be treated as
having acquired those new ordinary shares for
an amount equal to the cash equivalent.
Standard Life
9
Taxation in certain
jurisdictions outside the
United Kingdom
The following is provided as a general guide to
current tax law and current practice of the tax
authorities in Canada, the Republic of Ireland,
Germany and Austria. This may change at any
time and possibly with retrospective effect. It
is not advice.
Shareholders who are in any doubt as
to their tax position or who are resident
or domiciled in or subject to tax in a
jurisdiction other than the jurisdictions
referred to above should consult their
own professional advisers immediately.
Shareholders should consider their tax
position before participating in the Scrip
dividend scheme. Shareholders previously
within the Standard Life plc dividend
reinvestment plan, or shareholders who join
the Scrip dividend scheme, who respectively
do not wish to be in, or to remain in, the
Scrip dividend scheme are referred to the
terms and conditions for details on what
they need to do in order not to participate
in, or continue to participate in, the Scrip
dividend scheme.
Canadian taxation
The Canadian tax treatment of cash dividends
received by our shareholders will not change
following the implementation of the Scrip
dividend scheme.
The Scrip dividend scheme will be treated as a
program for the reinvestment of cash dividends
for purposes of the Income Tax Act (Canada)
(“ITA”). Therefore, a shareholder resident for
tax purposes in Canada who participates in
the Scrip dividend scheme and who is not an
affiliate of Standard Life plc will normally be
taxable on the cash value of the dividends
that are treated as reinvested in its ordinary
shares, being the amount of the cash dividends
foregone by the shareholder as a result of
electing to participate in the Scrip dividend
scheme, (which generally must be converted
to Canadian dollars in accordance with the
ITA) at their applicable personal or corporate
10 Standard Life
tax rates. The top personal tax rate under the
ITA for 2009 is 29% for income in excess of
$126,264 (Cdn). Income tax is also levied by
each Canadian province, with the rate varying
among provinces. Corporate tax rates under the
ITA and provincial income tax legislation also
vary, depending on the type of corporation for
tax purposes.
Provided that a shareholder resident for tax
purposes in Canada holds shares as capital
property, the amount of the cash dividends
foregone by that shareholder as a result of
electing to participate in the Scrip dividend
scheme will be considered to be the cost of
the new ordinary shares and will be included
in determining the adjusted cost base of
the Canadian shareholder’s shares. Where a
Canadian shareholder disposes of shares held as
capital property, a capital gain will arise to the
extent that the proceeds of disposition exceed
the adjusted cost base of the shares (or a capital
loss if the proceeds are less than the adjusted
cost base of the shares). 50% of any capital gain
(the taxable capital gain), less allowable capital
losses, is included in the Canadian shareholder’s
income for the year in which the capital gain
arose and is subject to tax at the Canadian
shareholder’s applicable personal or corporate
tax rate. Capital losses arising in a taxation year
are generally applied to offset capital gains
arising in the same year, and excess losses may
be carried back for up to three taxation years or
carried forward indefinitely.
Irish taxation
An Irish tax resident who receives new ordinary
shares as a Scrip dividend will be treated
as having received income from us of an
amount equal to the amount that such person
would have received had the person opted to
receive the dividend in cash instead of new
ordinary shares.
An Irish tax resident individual will, depending
on the individual’s circumstances, be subject to
Irish income tax and the income levy on such
deemed income. The standard rate of income
tax is currently 20% and the marginal rate of
income tax is currently 41%. The income levy is
currently charged at up to 3%, depending on
the individual’s circumstances.
For an Irish tax resident company, the deemed
income will be subject to Irish corporation tax,
currently at the rate of 12.5%, provided that
the company does not own or hold more than
5% of the share capital and voting rights in
Standard Life plc.
For Irish capital gains tax purposes, the amount
of the deemed income shall be treated as
enhancement expenditure incurred by the
Irish resident person on the original shares
in Standard Life plc held by that person and
should be taken into account as appropriate
in calculating any subsequent disposal by that
person of their shares in Standard Life plc.
The Irish Minister for Finance is due to
announce a budget to the Irish Parliament on
7 April 2009 at which time increases in the
income levy, income tax and corporation tax
rates may be announced.
German taxation
Individual shareholders resident for tax
purposes in Germany who receive new ordinary
shares as Scrip dividends will be regarded as
being in receipt of dividend income for German
tax purposes and will be subject to German
personal income tax on an amount equal to
the share market value on the distribution day
at a rate of 25% plus a solidarity surcharge of
5.5% on the income tax (26.375% in total).
Dividends (including Scrip dividends) from
Standard Life plc should, in general, not be
subject to German withholding tax, unless the
shares are deposited with a German branch of
a German or foreign bank or financial services
institution in which case withholding tax at the
rate of 26.375% (including solidarity surcharge)
will apply.
If the shares qualify as business assets of an
individual, 60% of each dividend will be subject
to German personal income tax but there will
be no German withholding tax. In general,
the dividend income will also be subject to
(municipal) German trade tax of approximately
14% which may be (partially) credited against
the personal income tax.
As a general matter, capital gains from the sale
of shares received by a participant in the Scrip
dividend scheme resident for tax purposes in
Germany will be taxed in the same manner
as dividends.
In the case of corporate shareholders resident
in Germany, cash and Scrip dividends as
well as capital gains from the sale of shares
in Standard Life plc should, in general, be
tax exempt except for 5% of the amount of
any dividend. The corporate income tax rate
amounts to 15% plus the solidarity surcharge
of 5.5% thereon (15.825% in total). In
addition, trade tax of approximately 14% will
be generally levied on the amount of non
deductible expenses (which will be 5% of the
amount of any dividend). The total tax will
therefore be approximately 30% on 5% of
the dividend.
Neither cash nor Scrip dividends nor capital
gains from the sale of shares in Standard Life plc
will be subject to German withholding tax.
Austrian taxation
A shareholder resident for tax purposes in
Austria who receives new ordinary shares
as a dividend in kind (Sachdividende) should
be treated as receiving capital income
(Einkünfte aus Kapitalvermögen) under Austrian
income tax law and such dividends should
be reported in that shareholder’s income tax
return as foreign capital gains with a tax rate
of 25% applying.
Where the shares concerned are deposited
with a securities account held in Austria, the
Austrian depositary would be obliged to deduct
Austrian withholding tax of 25% on the account
of the shareholder. Income taxation applicable
to individuals will be final, if withholding
taxation applies.
Where the share dividends concerned would
normally be regarded as income related
to the commercial business (Einkünfte aus
Gewerbebetrieb) of an individual, income
tax at the rate of 25% would apply to the
share dividends.
Standard Life 11
An individual shareholder resident for tax
purposes in Austria will be liable for capital
gains tax on disposal of the shares if sold
within a period of one year. However, a liability
for capital gains tax may also occur on a
disposal after the one year period in certain
circumstances, such as where the shares were
held within the shareholder’s business assets.
Telephone contact details
Where the share dividends concerned would
be regarded as income of a corporation
resident for tax purposes in Austria, the income
represented by the share dividends would be
treated as part of the overall income of the
corporation, to which a flat tax rate of 25%
would apply, unless either the participation
exemption applied (i.e. the corporation has at
least a 10% shareholding for at least one year
in Standard Life plc) or “portfolio dividends”
are received.
Canada
UK and Ireland
0845 275 3000
or +44 (0)131 270 9060
Germany and Austria
+49 (0)89 3090 3625
1-866-982-9939
or at the local number 514-982-9939
Lines are open from 9am to 5pm, Monday to
Friday. Please note that calls may be recorded/
monitored and charges may vary.
The Austrian tax treatment of dividend income
and capital gains on the disposal of shares may
vary according to the particular circumstances
of each individual or corporate taxpayer.
Please remember that the value of shares can go down as well as up and you may not get back the full amount invested or any
income from it. Any new ordinary shares issued pursuant to the Scrip dividend scheme will carry the same rights and be exposed to
the same risks as your existing ordinary shares.
Copies of the most recent financial statements of Standard Life plc, together with details of announcements made by it via regulatory
information service within the last 12 months are available at www.standardlife.com
Gerry Grimstone
Chairman
9 April 2009
Malcolm J Wood
Group Company Secretary
and General Counsel
Standard Life plc, registered in Scotland (SC286832), Standard Life House, 30 Lothian Road, Edinburgh EH1 2DH.
Calls may be recorded/monitored and call charges may vary. www.standardlife.com
UKSCRIP 0409 ©2009 Standard Life
Printed by Polestar, UK Print
This document is published by Standard Life plc, as issuer of the new ordinary shares under the Scrip dividend scheme. For Austrian
shareholders, it is issued in reliance on the exemption set out in section 3, paragraphs 1 to 6, of the Austrian Capital Markets Act
(Kapitalmarktgesetz – KMG).