Historical information
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We are unable to advise shareholders on taxation. The documents below on base cost apportionment have been provided for indicative guidance only for UK shareholders, US shareholders and US ADR holders.
Demerger of M&G plc – base cost apportionment for UK shareholders
Demerger of M&G plc – base cost apportionment for US shareholders and ADR holders
With effect from 3rd March 2023, the tax residence of Prudential plc changed from the UK to Hong Kong. The change in tax residence does not impact Prudential plc’s legal structure or place of incorporation which remains in the UK.
The following is a summary of the principal UK tax, US federal income tax, Hong Kong tax and Singapore tax considerations for holders of Prudential plc ordinary shares or ADSs arising from the change of tax residence of Prudential plc. The summary is intended only as a general guide and does not constitute tax advice. It is not intended to be a comprehensive description of all of the tax considerations that may be relevant to any particular investor, and does not address the tax treatment of investors that are subject to special rules, investors who are not the beneficial owners of their Prudential plc ordinary shares or ADSs and any dividends paid in respect of them, or investors who do not hold their ordinary shares or ADSs as investments. You should consult your own tax adviser regarding the tax consequences of the ownership of Prudential plc ordinary shares or ADSs in the context of your own particular circumstances. The summary is based on laws, treaties, judicial decisions, published practice and regulatory interpretations in effect on 3rd March 2023, all of which are subject to change possibly retrospectively.
As noted above, the change in Prudential plc’s tax residency does not impact Prudential plc’s legal structure or place of incorporation which remains in the UK. Ordinary shares issued by Prudential plc that are registered on the main UK share register or the Hong Kong share register will continue to be so registered. The change in Prudential plc’s tax residence should leave the legal form of shareholders’ investments undisturbed i.e. the ordinary shares or ADSs held before the change in tax residency are the same as the shares held after.
Withholding taxes
Prior to the change in tax residence, dividends paid by Prudential plc in respect of the ordinary shares or ADSs were not subject to withholding tax at source in the UK. Upon Prudential plc becoming a tax resident of Hong Kong, there will be no change in this position. Dividends paid by Prudential plc in respect of the ordinary shares or ADSs will not be subject to withholding tax at source in Hong Kong.
Subject to the exception below in respect of “small companies”, the UK tax treatment of dividends received by UK tax resident shareholders in respect of ordinary shares in Prudential plc after the tax residence change of Prudential plc should not differ from the UK tax treatment of such dividends prior to the tax residence change.
Shareholders who are within the charge to UK corporation tax as "small companies" (as that term is defined in section 931S of the Corporation Tax Act 2009) will be liable to UK corporation tax on dividends paid to them by Prudential plc in respect of ordinary shares following its tax residence change because Prudential plc is not resident in a "qualifying territory" for the purposes of the legislation contained in the Corporation Tax Act 2009. This is because Prudential understands that HMRC does not consider Hong Kong to constitute a “qualifying territory”.
For UK tax resident shareholders who are required to complete UK tax returns, dividends received by such shareholders after 3rd March 2023 should be taxed under the heading of dividends from non-resident companies rather than dividends from UK resident companies.
The UK capital gains tax treatment (and UK corporation tax on chargeable gains treatment where relevant) of disposals of Prudential plc ordinary shares after the tax residence change of Prudential plc should not differ from the UK tax treatment of disposals of Prudential plc ordinary shares before the tax residence change.
UK stamp duty / stamp duty reserve tax (SDRT)
In summary, the change in tax residence of Prudential plc should not affect the UK stamp duty / SDRT position in respect of Prudential plc ordinary shares.
A sale of Prudential plc ordinary shares will generally be subject to UK stamp duty (if the shares are in certificated form) or SDRT (if the sale is settled through the UK’s CREST system of paperless transfers). Any stamp duty payable (as opposed to SDRT) is rounded up to the nearest £5. No stamp duty (as opposed to SDRT) will be payable if the amount or value of the consideration is (and is certified to be) £1,000 or less. Stamp duty or SDRT is usually paid or borne by the purchaser. It should be noted that there are special rules relating to clearance services and depositary receipts. Certain categories of person, including market makers, brokers, dealers, and other specified market intermediaries, are entitled to exemption from stamp duty and SDRT in respect of purchases of securities in specified circumstances.
The above comments on stamp duty and SDRT apply in respect of Prudential plc ordinary shares on the main UK register. Generally speaking (subject to special rules relating to clearance services and depositary receipts), a sale of Prudential plc shares on the Hong Kong register should not be subject to UK stamp duty or SDRT provided that any instrument of transfer in respect of such ordinary shares is executed outside the UK.
Dividends received with respect to the Prudential plc ordinary shares or ADSs should be qualified dividends if Prudential plc was not, in the year prior to the year in which the dividend was paid, and is not, in the year in which the dividend is paid, a passive foreign investment company (PFIC)) and either (i) at the time a dividend was paid, Prudential plc was eligible for the benefits of the 24th July 2001 Treaty between the United States and the UK (“the US-UK Treaty”) or (ii) such ordinary shares or ADSs were at such time readily tradeable on an established securities market in the United States.
Based on the nature of its business activities and its expectations regarding such activities in the future, Prudential plc believes that it was not treated as a PFIC within the meaning of the US tax code with respect to its 2022 taxable year and does not anticipate becoming a PFIC for its 2023 taxable year.
Dividends received with respect to ADSs are expected to continue to be qualified dividends as the ADSs are expected to continue to be listed, and be viewed as readily tradeable, on the New York Stock Exchange (an established securities market in the United States). The US tax treatment of dividends received with respect to ADSs is not expected to be impacted by the tax residence change of Prudential plc.
Following the change of tax residence of Prudential plc from the UK to Hong Kong effective from 3rd March 2023, Prudential plc is no longer eligible for the benefits of the US-UK Treaty, and as a result dividends paid after that date with respect to ordinary shares (which are not listed on an established securities market in the United States) are not expected to be qualified dividends. This change affects ordinary shares only and not ADSs.
The US tax treatment of disposals of Prudential plc shares and ADSs after the tax residence change of Prudential plc should not differ from the tax treatment of disposals of Prudential plc shares and ADSs before the tax residence change.
Any dividends received from Prudential plc should generally not be subject to Hong Kong tax in the hands of shareholders. This tax treatment should not be affected by the change of tax residence of Prudential plc.
Similarly, the Hong Kong tax treatment of the disposal of Prudential plc shares should not be affected by the change of tax residence.
Hong Kong stamp duty is chargeable on the purchase and sale of the Prudential plc shares listed on the Hong Kong stock exchange (borne equally by the purchaser and seller). In addition, a notional duty of HK$5 will also be payable on the instrument of transfer (if any). This treatment is unaffected by the change of tax residence of Prudential plc.
As Prudential plc is incorporated in the UK and is not tax resident in Singapore, dividends paid by Prudential plc will be considered as foreign-sourced (i.e. sourced outside Singapore).
Foreign-sourced dividends received in Singapore by an individual tax resident in Singapore are exempt from Singapore income tax. Foreign-sourced dividends received or construed to be received in Singapore by Singapore corporate tax residents will be subject to Singapore tax at the prevailing corporate tax rate, in the absence of any available tax incentive or tax exemption.
No stamp duty is payable in Singapore on the issuance or transfer of any Prudential plc shares.
Disposals of Prudential plc shares by Singapore tax resident individual shareholders should generally be viewed as personal investments in Singapore and therefore should not be taxable. Disposals of Prudential plc shares by Singapore tax resident corporate shareholders should be exempt from tax in Singapore if the investment in Prudential is regarded as being held on capital account.
This information is provided as indicative guidance only. Prudential plc accepts no responsibility for the use that may be made of this information. This does not constitute tax or financial advice and must not be relied upon as such. Any person wishing to calculate their United Kingdom chargeable gains should consider their own particular circumstances and consult an appropriate professional adviser.
A disposal of Prudential shares may give rise to a chargeable gain (or allowable loss) for the purposes of UK capital gains tax, depending on the circumstances and subject to any available exemption or relief. No indexation allowance will be available in respect of any disposal of Prudential shares. However, the capital gains tax annual exemption (which is £12,300 for individuals in the 2022/23 tax year; £6,000 for individuals in the 2023/24 tax year and scheduled to be £3,000 for individuals in the 2024/25 tax year) may be available to exempt any chargeable gain, to the extent that the exemption has not already been utilised. Capital gains tax is charged at a rate of 10% or 20% depending on the individual’s total taxable gains and income in the tax year in question.
A disposal of Prudential shares may give rise to a chargeable gain (or allowable loss) for the purposes of UK corporation tax, depending on the circumstances and subject to any available exemption or relief. Corporation tax is charged on chargeable gains at the rate applicable to that Prudential shareholder.
Where a holding of shares has been acquired through a series of transactions over a period of time, and only part of the holding has been disposed of, there are special rules to identify which shares have been disposed of. In addition, where there have been company reorganisations such as bonus issues and rights issues, these need to be taken into account when calculating the tax base cost of shares disposed of. Please consult an appropriate professional adviser if these complexities arise.
If some or all of the shares sold were acquired before 31 March 1982, the market value at 31 March 1982 is used in computing the chargeable gain.
The unadjusted 31 March 1982 market value for Prudential plc (then Prudential Corporation plc) was £2.4675 (source – ICE Capital Gains Tax service checked via ICAEW Library service).
In May 1988 each Prudential share was split into 5 shares (thus reducing the nominal price from 25p shares to 5p shares). No consideration was paid by shareholders in this transaction. This share split did not affect the total tax base cost of shares held prior to May 1988 but the base cost per share was adjusted.
For example, if a shareholder had acquired 1,000 shares for £7,500 (£7.50 per share) prior to May 1988, the tax base cost immediately after the share split would have become 5,000 shares at a cost of £7,500 equivalent to £1.50 per share.
In October 2004 Prudential offered a Rights Issue where shareholders were invited to subscribe for further Prudential shares on the basis of 1 new share for every 6 existing shares held, at a price of 308 pence each.
For historic holdings of shares to which the 2004 rights issue applied, the tax base cost is adjusted by adding the new shares acquired in the rights issue together with the price paid to the historic holding of shares and historic price paid.
For example: • If you had bought 1,200 shares in 2003 at £4 per share, the historic tax base cost would be £4,800 • In the rights issue, you would have received 200 new shares costing £616 • The revised holding is now 1,400 shares costing £5,416 (equivalent to £3.8686 per share)
In October 2019, Prudential demerged M&G Prudential (now M&G plc) by way of a dividend in specie. Shareholders received 1 share in M&G plc for every 1 share held in Prudential.
The pre-M&G demerger tax base cost of Prudential plc shares is apportioned between the post-demerger Prudential plc shares (86.2374%) and the M&G plc shares (13.7626%). Further information on this base cost apportionment is contained here.
In September 2021, Prudential demerged Jackson Financial Inc by way of a dividend in specie. Shareholders received 1 share in Jackson Financial Inc for every 40 shares held in Prudential plc.
As Jackson Financial Inc was a US business, this demerger was treated differently for UK tax purposes to the 2019 M&G demerger. The receipt of the Jackson Financial Inc shares was a taxable dividend for UK tax purposes. There was no apportionment of tax base cost between the two shareholdings. The tax base cost of Prudential plc shares was the same before and after the Jackson Financial demerger. The tax base cost in the Jackson Financial Inc shares was the value of the Jackson Financial Inc shares received for UK tax purposes. Further information on the value of Jackson shares for UK tax purposes is contained here.
On 3rd March 2023, Prudential plc’s tax residence changed from the UK to Hong Kong. This change had no impact on Prudential’s place of incorporation in the UK. The change of tax residence had no impact on the tax base cost of Prudential plc shares which was the same before and after the change of tax residence.
Applications for shares under the Hong Kong public offer are now closed.
Prudential announced on 28 January 2021 its intention to demerge Jackson, resulting in two separately listed companies. The shareholder circular in relation to the proposed demerger has now been approved by the UK’s Financial Conduct Authority and Jackson’s Form 10 registration statement in relation to the proposed demerger has been declared effective by the US Securities and Exchange Commission.
On 21 October 2019 we completed the demerger of M&G plc from Prudential plc. Following the demerger, Prudential is an Asia-led Group focused on capturing opportunities in structural growth markets. We have a global portfolio of businesses, each of which is executing on meeting a large and growing consumer need. In Asia, the growing middle class needs to save more and protect themselves from ill-health. In the United States, the growing ageing population needs more access to secure retirement income. And we are operating in markets in Africa with a total population of almost 400 million people.
As at 17 May 2010 the total number of issued ordinary shares of 5 pence each fully paid up in Prudential plc in respect of which members are entitled to exercise voting rights, and the total number of votes that members are entitled to exercise in respect of those issued ordinary shares, at the General Meeting of Prudential plc to be held on 7 June 2010 was 2,534,472,474.
In December 2005, an offer was made by Prudential to the minority shareholders in Egg plc to acquire the remaining 21 per cent of Egg shares on the basis of 0.2237 new Prudential shares for each Egg share held. On 4 April 2006, over 90 per cent of acceptances had been received, which then enabled Prudential to compulsorily acquire the remaining Egg shares on 16 May 2006. If you were formerly an Egg shareholder, your Egg shares were compulsorily acquired by Prudential and new Prudential shares were issued for you. For those who did not accept the original Prudential shares, the new Prudential shares were held in trust for them to claim them formally.
As more than 12 years have passed, in accordance with section 982 of the Companies Act 2006, all outstanding cash entitlements have been paid into Court. As a result, claims can only be made through the Court Funds Office.
To make an application, you will need the Court Case Reference Number which is 275/2018. The date of acceptance by the Court was 2 August 2018. More information about the process is available at the following website: http://www.nationalarchives.gov.uk/help-with-your-research/research-guides/funds-in-court/.
Our Receiving Agents for the Rights Issue were Lloyds TSB Registrars (now Equiniti). The deadline for receipt of the valid Provisional Allotment Letters was 11am on 10 November 2004, with new shares being credited to CREST accounts on 11 November 2004, and share certificates being posted on 22 November 2004.
The Rights Issue was not offered to shareholders with a registered address in Canada, France, New Zealand, South Africa, Japan, Spain, Switzerland, or the United States, except where the Company was satisfied that such action would not result in a contravention of any applicable legal or regulatory requirement in the relevant jurisdiction.
If you have any queries regarding the Rights Issue please contact our registrars Computershare.
In 1999 Prudential made an offer to the shareholders in M&G Group plc to acquire the company on the basis of £25.00 for each M&G share.
If you were formerly an M&G shareholder, your M&G shares have been compulsorily acquired by Prudential and cash consideration issued to you. If, however, you did not accept the original offer, your consideration is being held in trust for you and you will need to claim it formally.
As more than 12 years have passed, in accordance with section 982 of the Companies Act 2006, all outstanding cash entitlements have been paid into Court. As a result, claims will no longer be dealt with by the Company’s registrar, and can only be made through the Court Funds Office, Sunderland, SR43 3AB. TEL: 0300 0200 199 E-Mail: enquiries@cfo.gov.uk. As well as confirming personal details such as name and address, the information shareholders would need to provide is the case reference number 111/2013, the account name Dissenting Shareholders of M & G Group PLC (which subsequently changed its name to M & G Group Ltd) 2013 and the lodgement date of 4 June 2013.
Check dividend amounts for previous years.
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Contact details for M&G and Prudential UK customers and policyholders
For M&G and Prudential UK customers and policyholders:
In October 2019, Prudential plc separated its UK operations and, as a result of this separation, Prudential UK is now owned by M&G plc. The M&G plc group is a separate, independent group and as such we are not able to help any M&G or Prudential UK customers or policyholders.
Therefore, to find the best way to make contact, please visit www.pru.co.uk/contact-us
For further information on the M&G plc group, please visit the M&G website: www.mandg.com
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