Capital gains tax

Values at 31st March 1982

The market values of the former parent company's shares at 31st March 1982 (adjusted to take account of the 1986, 1990, 1993, 1995 and 1998 capitalisation issues) were:

Ordinary shares: 23.6509p
Non-voting ordinary shares: 22.7582p

Values related to disposal of investment banking business

Shareholders who received Schroders plc shares and Schroder Holdings (Jersey) Ltd (SHJ) shares in place of Schroders plc shares held prior to 18th April 2000 may have a liability to UK capital gains tax in respect of their disposal of the SHJ shares for a consideration of £3.00 per share to Salomon Smith Barney.

Shareholders on the register at 17th April 2000 received an additional 4.5132p per share in October 2000 under the terms of the Offer from Salomon Smith Barney dated 27th April 2000. This should be taken into account for capital gains tax in the same way as the original consideration of £3.00 per share. The base cost of the previously held shares should be apportioned between the SHJ shares and the new Schroders plc shares.

The Inland Revenue has confirmed the methodology to be used for this apportionment.

The market values for the new Schroders plc shares on their first day of trading were £9.77 for the ordinary shares and £8.05 for the non-voting ordinary shares.

The market value of the SHJ shares on that date was £3.00 and the apportionment of base cost is based on this value notwithstanding that the total consideration to be included in capital gains tax computations will include the additional consideration of 4.5132p.

For voting ordinary shares the base cost apportionment is:

- £9.77 ÷ 12.77 to the new Schroders plc shares,
- £3.00 ÷ 12.77 to the SHJ shares.

For non-voting ordinary shares, the base cost apportionment is:

- £8.05 ÷ 11.05 to the new non-voting Schroders plc shares and;
- £3.00 ÷ 11.05 to the SHJ shares.

Whether or not a liability to UK capital gains tax arises on the disposal of SHJ shares will depend on the individual circumstances of the shareholder and the form of consideration received:

- Where cash was received, the shareholder will be treated as having made a disposal or part disposal of the SHJ shares for capital gains tax purposes;
- To the extent that loan notes or shares were received, there is no disposal for capital gains tax and any gain or loss which would have arisen on a disposal will be ‘rolled over' into the loan notes or shares. These are treated as the same asset as the relevant holding of SHJ shares for which they were exchanged. Any subsequent disposal of the loan notes or shares may give rise to a capital gain or loss depending on individual circumstances. In calculating the capital gain arising on any such disposal, the holder's acquisition costs will be deemed to be the original acquisition cost to the holder of the relevant holding of SHJ shares.