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 December, 2007
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 20 November 2007, but those shares are included in the
number shown in box 1 on your Form of Election or Entitlement Advice for the
third 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
Limited.
5 December 2007
Dear Shareholder
SCRIP DIVIDEND SCHEME AND PAYMENT OF DIVIDENDS IN UNITED STATES DOLLARS,
STERLING OR HONG KONG DOLLARS
On 5 November 2007, your Directors declared a third interim dividend for 2007 of
US$0.17 per ordinary share, payable on 16 January 2008. You may elect to
receive:
1. a scrip dividend of new shares at a 'Market Value' of US$16.821 (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 November 2007, the third
interim dividend in sterling and Hong Kong dollars would have been approximately
GBP0.082 and HK$1.3237. The precise amounts which will be payable per ordinary
share in either sterling or Hong Kong dollars on 16 January 2008 will be
converted from United States dollars using the exchange rates on 7 January 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 2 January 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 2 January 2008. Before
using this facility 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.
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 2 January 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 2 January 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 the Form
of Election that has been sent to you and return it to the appropriate
Registrars, at the address given on page 8, or give an Electronic
Instruction, by close of business on 2 January 2008. If you take no action,
you will receive the dividend in cash in the currency indicated on the Form
of Election.
We will calculate your entitlement to new shares using a 'Market Value' of
US$16.821 (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.
HSBC Holdings plc
Registered Office and Group Head Office:
8 Canada Square, London E14 5HQ, United Kingdom
Web: www.hsbc.com
Incorporated in England with limited liability. Registered in England:
number 617987
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 23 November 2007, 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 23 November 2007, 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 23 November 2007, 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 or Entitlement Advice. If you have
received a printed Form of Election or Entitlement Advice and 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 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 or give an
Electronic Instruction, by close of business on 2 January 2008.
Dividends payable in sterling or Hong Kong dollars on 16 January 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 7 January 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 16 January 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 third interim dividend for 2007.
Holders of ordinary shares on the Principal Register as at the close of
business in England on 23 November 2007 or on the Hong Kong Overseas Branch
Register as at the close of business in Hong Kong on 23 November 2007 or on
the Bermuda Overseas Branch Register as at close of business in Bermuda on
23 November 2007 (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 third interim dividend for 2007 of US$0.17 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 21 November 2007
(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
November 2007, giving the Market Value of US$16.821 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$16.821 per
share;
(b) the cash dividend of US$0.17 per share; and
(c) the number of shares held by you on 23 November 2007 ('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 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
Cash dividend of US$0.17 per share (rounded up to the nearest whole
number)
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).
Example 1
If you have 1,000 ordinary shares, your maximum entitlement will be
calculated as follows:
Your cash dividend (1,000 x US$0.17) US$170.00
Plus residual dividend entitlement brought forward (say) US$ 4.00
Maximum dividend available US$174.00
Number of new shares = US$174.00 = 10.3442
US$16.821 = 10 new shares
Total Market Value of 10 new shares = 10 x US$16.821 US$168.21
Plus residual dividend entitlement carried forward
(US$174.00 - US$168.21) US$ 8.79
US$174.00
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 10 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
in the relevant box if giving an Electronic Instruction through 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$0.17) US$170.00
Plus residual dividend entitlement brought forward (say) US$ 4.00
Maximum dividend available US$174.00
500 existing shares on which you wish to receive new shares
(500 x US$0.17) US$85.00
Plus residual dividend entitlement brought forward (say) US$ 4.00
Total available to elect for new shares US$89.00
Number of new shares US$89.00 = 5.291
US$16.821 = 5 new shares
Total Market Value of 5 new shares = 5 x US$16.821 US$ 84.11
Plus residual entitlement to be carried forward to next
dividend (US$89.00-US$84.11) US$ 4.89
Plus balance of maximum dividend available to be paid in
cash (US$174.00-US$89.00) US$ 85.00
Maximum dividend available US$174.00
In addition to the 5 new ordinary shares, you will receive a cash balance
of US$85.00 and US$4.89 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, 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 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 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 dollars USD 167 Shares
(iv) Number of shares on which I wish to receive cash in Hong Kong dollars HKD 166 Shares
Total number of existing shares (the sum of (i) to (iv)) 1000 Shares
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4. Payment of residual dividend entitlements
Residual dividend entitlements will be payable in cash (without interest)
if, at any time, you:
o dispose of your entire holding; or
o receive the full cash dividend on the whole of your holding; or
o revoke your standing instructions to receive scrip dividends; or
o 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 2 January 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 2 January
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 2 January 2008. In any
event, if you revoke your standing instructions you will receive a printed
Form of Election or be able to give an Electronic Instruction for any
future dividends to which the Scheme applies.
(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 the Form of Election or by giving an Electronic
Instruction. A printed Form has been issued to shareholders registered as
at 23 November 2007 and should be read in conjunction with 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
the 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 16 January
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 2
January 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 the Form of Election or by making the appropriate election when
giving an Electronic Instruction. To be valid in respect of the dividend
payable on 16 January 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 2 January 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 third interim
dividend for 2007 payable on 16 January 2008 and for subsequent dividends.
Your standing instructions may be revoked by giving signed notice in
writing at any time 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.
However, such revocation will take effect in respect of an offer of shares
in lieu of a cash dividend only if the notice is received before the
relevant deadline date. 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 23 NOVEMBER 2007 OF FEWER THAN 99
ORDINARY SHARES WHO HAVE GIVEN STANDING INSTRUCTIONS TO RECEIVE SCRIP
DIVIDENDS OR WHO GIVE AN ELECTION TO RECEIVE SCRIP DIVIDENDS, AND
SHAREHOLDERS WHO GIVE AN ELECTION TO RECEIVE SCRIP DIVIDENDS ON FEWER THAN
99 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 16 January 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 16 January 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 16
January 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
20 November 2007 (the date on which the shares eligible for the third
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 or
Entitlement Advice, 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 2007,
119,543,794 new shares would be issued, representing an increase of 1.01
per cent in the issued ordinary share capital of the Company as at 27
November 2007.
The total cost of the third interim dividend for 2007, ignoring any
elections for the scrip alternative, is approximately US$2,011million. The
applicable tax credit is the sterling equivalent of approximately US$223
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 23 November 2007
- 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.
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 starting rate
or 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 starting 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 starting rate
or 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 & 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
starting 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
American Depositary Shares quoted ex-dividend in New York 20 November 2007
Ordinary shares quoted ex-dividend in London, Hong Kong and Bermuda 21 November 2007
Record date for the third interim dividend for 2007 23 November 2007
Ordinary shares quoted ex-dividend in Paris 26 November 2007
FINAL DATE FOR RECEIPT BY REGISTRARS OF FORMS OF ELECTION, REVOCATIONS OF STANDING 2 January 2008
INSTRUCTIONS FOR SCRIP DIVIDENDS AND ELECTRONIC INSTRUCTIONS
Exchange rate determined for payment of dividends in sterling and Hong Kong dollars 7 January 2008
Payment date - dividend warrants mailed; new share certificates or Bermuda Overseas Branch 16 January 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 16 January 2008
American Depositary Shares in New York
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 Wan Chai
BS99 3FA Hong Kong
United Kingdom
Telephone: (44) 0870 702 0137 Telephone: 2862 8555
Email: web.queries@computershare.co.uk Email: hkinfo@computershare.com.hk
Investor Centre: www.computershare.com/investor/uk Investor Centre: www.computershare.com/hk/investor
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
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*, J D Coombe+, R A Fairhead+, D J Flint, W K
L Fung*, J W J Hughes-Hallett+, Sir Mark Moody-Stuart+, G Morgan+, S W Newton+,
S M Robertson+ and Sir Brian Williamson+.
* Non-executive Director
+ Independent non-executive Director
Printed by Computershare Investor Services PLC, Bristol, UK, on Mega paper. Made
in Germany, the paper comprises 50% recycled and de-inked fibres from pre- and
post-consumer waste, and 50% virgin fibre. Pulps used are totally chlorine-free.
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: 05 December 2007