TAX-FREE SHARE PLAN WATCH YOUR SHARES MULTIPLY

Transcription

1 TAX-FREE SHARE PLAN WATCH YOUR SHARES MULTIPLY

2 Overview As employees of Saint-Gobain we share fundamental values that underpin everything we do, whether you are in a plant, branch, office or on the road, they guide the way we behave as individuals and as a Group. At their core is the desire to work to improve our world: improve the way we build our homes, shops, offices and factories; improve how we operate as a business; and improve our prosperity. Employees are the largest group of shareholders in Saint-Gobain and our Tax-Free Share Plan is just one way that you can own part of Saint-Gobain and become part of that shared vision. By becoming a shareholder you are not only planning for your future through investing and saving but you are helping to build the Saint-Gobain of tomorrow. If you are a Saint-Gobain employee and are subject to UK income tax, you are eligible to participate in our Tax-Free Share Plan once you have met the Qualifying Service Requirement. Watch your shares multiply

3 What is it? It s a trust based HMRC tax advantaged investment plan and a tax effective convenient way to invest for your future by buying Saint-Gobain shares. You can apply on-line anytime and there are no complicated application forms. You can control the amount you invest, between 10 and 150 each month (up to 1,800 a year or 10% of your annual gross salary, whichever is lower). You re not locked into paying the same amount for any length of time either if you want change your investment one month or not save anything at all, you can. You do not pay income tax or National Insurance on the amount you invest and it is deducted straight from your pay. > Invest between 10 and 150 a month from your pay > Get 1 free share for every 4 you buy > Pay no income tax or National Insurance if you keep the shares for 5 years > Stop, start or change your monthly amount whenever you want And for every four Saint-Gobain shares you buy we will give you one Saint-Gobain share for free.

4 How does it work? You can choose to invest between 10 and 150 each month. This amount is taken from your pay before tax so you don t pay any Income Tax or National Insurance on the amount you invest. You can invest up to 150 a month or 1,800 a year in our Tax-Free Share Plan, or up to 10% of your annual salary, whichever is lower. Computershare, the administrator of our Tax-Free Share Plan, uses the money you subscribe to buy Saint-Gobain shares at market value on your behalf. These are called Partnership Shares. Only whole shares can be bought, so any money left over is rolled over to the next month. The Partnership Shares are bought once a month for everyone in the Plan, on the Award Date. For every four Partnership Shares you buy, we give you one share completely free. These shares are called Matching Shares and they re added to your shares held in the plan administered by Computershare. Matching Shares are worth the same as Partnership Shares the only difference is that if you withdraw or sell your Partnership Shares within three years of the Purchase Date, you may forfeit the related Matching Shares.

5 How does it work? You can change the monthly amount you invest in our Tax-Free Share Plan whenever you want. If you feel you can invest more for a month or two, you can increase your monthly amount up to the 150 limit. You may choose to stop or reduce your contributions. Just log into your account online and tell us how much you want to invest. Your Partnership Shares and Matching Shares are held in an account administered by Computershare. You don t need to do anything your shares are held securely. You can see how many shares you have and what they re currently worth by logging into your account online. Saint-Gobain pays all the administration costs for the Tax-Free Share Plan, so you ll have no annual fees or charges to pay.

6 How does it work? As you ll be a shareholder in Saint-Gobain, you ll receive any dividends that are paid. Dividends are dependent on the performance of Saint-Gobain. The default French Withholding Tax rate is currently 30%. In accordance with the Tax Treaty between the UK and France we will endeavor to claim at the preferential tax rate which is currently 15%. This cannot be guaranteed and if for any reason the default tax rate (currently 30%) is applied at source we will endeavor to recover the additional tax but it will result in delayed payment of the additional tax withheld. There may be tax payable through Self-Assessment if you receive dividend income (from all sources) in excess of the 2,000 annual allowance. You can sell your Partnership Shares or withdraw them from your account any time. You can sell your shares by logging into your account online and transfer the proceeds, minus any costs, to your bank account. A dealing fee of 0.75% of the gross sale proceeds (subject to a minimum fee of 28) and a currency conversion commission of 1.5% will be applied to each online share sale. If you withdraw or sell your Partnership Shares within three years of buying them, you forfeit the free Matching Shares that you were given at the time. You will need to pay Income Tax and National Insurance contributions on the value of your Partnership Shares if you ve had them less than five years. After holding your Partnership and Matching Shares shares for three years, you can sell or remove the shares from the Tax-Free Plan. You may need to pay Income Tax and National Insurance contributions on their value on the date you bought them, or when you sell them whichever is lower. Once you ve held onto your shares for five years, you can take all of them out of the trust or sell them without paying any Income Tax or National Insurance contributions at all. If you sell your shares from the trust, there is no CGT payable.

7 What it means for your pay To show how investing in our Tax-Free Share Plan works, let s look at George. His pay is 18,000 a year ( 1,500 a month)*. George decides to invest 70 a month in our Tax-Free Share Plan. *His maximum income tax rate is the Basic Rate (20%) on his earnings over 11,500 (his personal allowance for the tax year to 5 April 2018). He also pays National Insurance contributions at 12% on his earnings over a minimum threshold ( 680 per month for the tax year to 5 April 2018). Before joining our Tax-Free Share Plan Monthly gross salary (or pre-tax pay) 1, Income Tax National Insurance Net salary (pay after tax) Investing 70 a month Monthly gross salary (or pre-tax pay) Tax-Free Share Plan savings 1, Income Tax National Insurance Net salary (pay after tax) George gets worth of shares* a month and it only costs him *So although he is investing 70 each month, George s take home pay only goes down by per month. When you include the free Matching Shares, this means George gets shares worth every month, for only a deduction from his take-home pay.

8 What are the risks? As with any investment related to shares and the stock market, there are risks with our Tax-Free Share Plan. The value of Saint-Gobain shares can go down as well as up When you invest in our Tax-Free Share Plan, you re buying shares in Saint-Gobain. These shares are traded on the Euronext Paris stock market in France, and like any publicly traded share, they can go down as well as up in value. What effects could this have on your shares? 1. The shares you buy one month could be worth more or less in the future. 2. Even if you invest the same amount of money in our Tax- Free Share Plan every month, the number of shares that you can buy might change. If the share price goes up (increasing in value), your monthly investment will buy you fewer shares; if the share price goes down, your investment will buy more shares. The advantage you have as an investor in our Tax-Free Share Plan is that you get one share free for every four you buy (not something ordinary investors get) and that you don t pay any Income Tax or National Insurance on the earnings you use to buy the shares with, provided that you hold onto them for five years. Your investment can be affected by the Euro/Pounds Sterling exchange rate Saint-Gobain shares are traded in Euros. This means that your monthly investment will need to be converted from Pounds Sterling into Euros in order to buy your shares, and then back again when you sell them. Depending on the relative values of the Pound and the Euro at the time your shares are bought or sold, you could get more or less for your money. While we can tell you about our Tax-Free Share Plan and how it works, we can t give you advice as to whether it s suitable for you. If you re unsure whether the plan is right for you, please talk to an Independent Financial Advisor (IFA) before joining.

9 Selling your shares during employment You can sell your Partnership Shares whenever you want, but the longer you hold onto them, the bigger the potential benefit: If you sell them within the first three years, you may forfeit the Matching Shares you received with them. Hold onto your Partnership Shares for over three years and the Matching Shares are yours. Keep your Partnership Shares for five years, and you can sell them and your Matching Shares completely free of Income Tax and National Insurance. Length of time you ve held the shares before selling or withdrawing them Less than 3 years 3 to 5 years Over 5 years Partnership Shares Income tax and National Insurance on the value of shares on sale or withdrawal. The related Matching Shares will also be forfeited. Income tax and National Insurance on the lower of the value of shares on sale or withdrawal and the amount invested. No Income Tax and National Insurance due Matching Shares Sale or withdrawal not normally allowed. Income tax and National Insurance on the lower of the value of shares on sale or their value when awarded. No Income Tax and National Insurance due Irrespective of when your shares are sold from our Tax-Free Share Plan, there will be no Capital Gains Tax on any growth in their value. If you withdraw them, you will be deemed to acquire them at that time for market value when working out the gain or loss on any later disposal. Please note, this tax information is provided for general information only, and is not personal advice. For specific advice, please contact a qualified tax advisor. Capital Gains Tax (CGT) CGT is special tax charged on the profits from selling shares or other investments. If you sell your shares straight from our Tax-Free Share Plan trust, you won t need to pay any CGT. If you transfer your shares to a different account and then sell them later, you might have to pay it but only on the amount your shares increase in value in the meantime. Like Income Tax, everyone has a personal CGT allowance, an amount up to which you aren t taxed on. For the financial year running from April 2017 to April 2018, you won t be charged CGT on the first 11,300 you make in profits in those 12 months. You can find further information on the HMRC website.

10 What happens if I leave Saint-Gobain? If you leave Saint-Gobain, you won t be able to carry on investing in our Tax-Free Share Plan. Any Partnership Shares you hold in our Tax-Free Share Plan will need to be sold or transferred out of the trust, and you may need to pay Income Tax and National Insurance on their value if you ve had them for less than five years. Whether you can keep your Matching Shares depends on why you re leaving Saint-Gobain: If you: Your Partnership Shares: Your Matching Shares: Resign or are dismissed Must be sold or transferred to another investment or share trading account. If you ve held them less than 5 years, you may need to pay Income Tax and National Insurance on their value. Are yours to sell or transfer if you ve held the related Partnership Shares for 3 years or more. If you ve held them less than 5 years, you may need to pay Income Tax and National Insurance on their value. Leave due to death, disability, injury, redundancy, retirement (after 50), a change in control of Saint-Gobain or TUPE transfer Can be sold or transferred without paying Income Tax or National Insurance, however long you ve had them for. If you don t want to sell them, we will transfer them to the Saint-Gobain Registrar, BNP Paribas Securities Services; if you later sell the shares, upon request we will reimburse you for any dealing costs incurred by BNP Paribas Securities Services. Are yours, however long you ve had the related Partnership Shares for. Can be sold or transferred without paying Income Tax or National Insurance. If you don t want to sell them, we will transfer them to the Saint-Gobain Registrar, BNP Paribas Securities Services; if you later sell the shares, upon request we will reimburse you for any dealing costs incurred by BNP Paribas Securities Services.

11 The Plan over time While you can sell your Partnership Shares immediately, the potential benefits are greater if you hold onto them for three years at that point you can sell the associated free Matching Shares too. The potential benefits are even greater if you hold onto them for five years as there will be no Income Tax or National Insurance to pay either. This timeline shows how George invests in our Tax- Free Share Plan, when he decides to sell his shares and what it means for him and his investment. This timeline is intended to show how our Tax-Free Share Plan works over time. The investment sums, share prices and Matching Share awards featured here are examples only and you should not use them as a guide to how our Tax-Free Share Plan will perform for you. The value of shares can go down as well as up, as can the exchange rate between Pounds Sterling and Euros (Saint-Gobain shares are bought and sold on the Euronext Paris stock market), both of which can affect the value of your investment. June 2017 George decides to invest 70 a month. September 2017 George buys another 2 Partnership Shares in September with his August deduction and he gets 1 Matching Share. So in 2 months he has 5 shares. January 2019 George suspends his monthly investment. December 2019 George increases his monthly investment to 80. September 2020 George can sell the 4 Partnership Shares he bought in August and September 2017, and the 1 free Matching Share he received. He sells all 5 shares but has to pay Income Tax and National Insurance on the shares, calculated using the shares value when he bought them in 2017, as that is lower than their value in July 2022 It s been five years since George made his first monthly investment. Because he sold the shares he bought in August and September 2017 in September George doesn t yet have any shares he can sell yet without paying Income Tax and National Insurance July 2017 George s investment comes out of his monthly pay. His 70 investment only cost him August 2017 George s July deduction buys him 2 Partnership Shares. April 2019 George starts investing 70 a month again. July 2020 It s been three years. George doesn t want to sell the Partnership Shares he bought in August and September 2017 yet because he would forfeit the Matching Share. October 2020 George enjoyed spending the money he gained from selling the 5 shares but decides to keep his shares in the trust for five years from now on so he doesn t have to pay Income Tax and National Insurance on them when he sells them. November 2022 This month George can sell the 2 Partnership Shares he bought in October 2017 and the 2 he bought in November 2017 without paying any Income Tax or National Insurance, as well as the Matching Share. He sells all 5 shares and treats himself with the money.

12 Participating in our Tax-Free Share Plan You can join our Tax-Free Share Plan, check your shares and sell them at Joining 1. Enter your SRN this will be sent to you once you re eligible to join 2. Create a PIN and set up your security questions 3. Select Portfolio and then Apply 4. Enter the amount you d like to invest every month 5. Confirm and you re done Changing your investment 1. Sign in with your User ID and PIN 2. Select Contributions and then Change 3. Enter the new amount you d like to invest every month 4. Changes will take effect in the next available payroll run Selling shares 1. Sign in with your User ID and PIN 2. Select Portfolio and then Transact 3. Select Sell and follow the instructions 4. Enter your PIN number again to confirm your sale 5. The proceeds will be included in your pay next month When can I join? You can join our Tax-Free Share Plan at any time once you have completed three months service, following receipt of your invitation. You ll be sent an SRN with your invitation, together with a PIN that will be sent under separate cover.

13 Glossary Additional rate The rate of Income Tax paid on amounts over 150,000 and at the time of writing is 45%. Administrator Computershare is the administrator of our Tax-Free Share Plan. They buy shares in Saint-Gobain on your behalf and handle the day-to-day management of the Plan. Award Date The date on which you are given the Partnership Shares bought on your behalf by the administrator, as well as any free Matching Shares. Basic rate At the time of writing, the rate of Income Tax you paid on amounts up to 33,500 is 20%. People start paying this on income over the Personal Allowance of 11,500. Capital Gains Tax Charged on the profits you make from selling shares or other investments. For the financial year running April 2017 to April 2018, you won t be charged on profits up to 11,300 your annual tax-free allowance. Computershare The Administrator of our Tax-Free Share Plan. Exchange Rate The rate at which one currency is converted into another, for example Pounds Sterling into Euros. You can search for up-to-the-minute exchange rates online. Higher rate At the time of writing the rate of Income Tax paid on amounts between 45,000 and 150,000 is 40%. Income Tax A tax you pay on your income, which is collected by HMRC on behalf of the Government. Matching Shares Free shares you get when you buy Partnership Shares. You get one Matching Share for every four Partnership Shares, but must hold them and the Partnership Shares that generated them for at least three years before you can sell or withdraw them. National Insurance At the time of writing, this is charged at 12% of your weekly earnings between 157 and % is paid on earnings over 866 a week. National Insurance contributions are made to qualify for certain benefits including the State Pension. Euronext Paris The stock market in France that Saint-Gobain shares are traded on. Partnership Shares Shares bought with your monthly investment. Personal Allowance The amount you can be paid in a year without being charged Income Tax. All earnings over this amount are taxed at the Basic, Higher or Additional rate depending upon your salary. At the time of writing, this is 11,500. PIN You will need to set up a PIN number when logging into our Tax-Free Share Plan website at: Qualifying Service Period - You can join our Tax-Free Share Plan at any time once you have completed three months service, following receipt of your invitation. You ll be sent an SRN with your invitation, together with a PIN that will be sent under separate cover. Trust All of the shares bought by the members of the Saint- Gobain community in our Tax-Free Share Plan are held in a trust managed by Computershare. While they are held in the trust your shares will be eligible for dividends, just like ordinary shares, and if you sell your shares from within the trust (rather than transferring them to another account first) you won t have to pay Capital Gains Tax on any profits you make. Shareholder Reference Number (SRN) Your unique SRN will be sent to you once you re eligible to join our Tax-Free Share Plan. You ll need it to log in to our Tax-Free Share Plan website at:

14 If you need more information If you ve got any questions about our Tax-Free Share Plan or would simply like to know more, get in touch with our specialist team at Computershare. Phone: * Online: Post: Computershare, The Pavilions, Bridgwater Road, Bristol, BS99 6AP Remember, while we can tell you about our Tax-Free Share Plan and how it works, we can t give you advice as to whether it s suitable for you. If you re unsure whether the plan is right for you, please talk to an Independent Financial Advisor before joining. * The Computershare team is available Monday to Friday, 8:30am to 5:30pm. Calls cost the same as calling an 01 or 02 number. If you have a free minutes call package, check with your provider that 03 numbers are included. 12D7PB D04