Separation of Chemours Company ( Chemours ) from E. I. du Pont de Nemours and Company ( DuPont )

Transcription

1 Separation of Chemours Company ( Chemours ) from E. I. du Pont de Nemours and Company ( DuPont ) Du Pont (U.K.) Limited Employee Share Scheme ( Scheme ) Q & A This Q&A document sets out a list of common questions and answers in relation to the separation of Chemours and DuPont s Performance Chemicals segment from DuPont ( Separation ) and its impact on shares held in the Scheme. These questions and answers are intended to provide general information and describe certain tax consequences for employees who are resident and domiciled in the UK. However, this Q&A should not be construed as giving personal tax or financial advice. If you are in any doubt as to the financial or tax consequences of the Separation or your holding/receipt of shares in either DuPont or Chemours, you should consult an independent financial or tax advisor. If you have any queries not dealt with here, please contact Computershare on the details set out below. However, please note that neither Computershare nor any employee of the DuPont group will be able to give you tax or financial advice. General Q1 A1 Q2 A2 Q3 A3 Q4 A4 Why am I receiving Chemours Shares? DuPont is separating its Performance Chemicals segment which is operated by Chemours and its subsidiaries (including Antec International Limited in the UK). This is being achieved by DuPont distributing shares in Chemours to all of DuPont s shareholders in proportion to the number of DuPont shares which are held by such shareholders. You are a shareholder in DuPont so will receive Chemours shares. How many Chemours Shares will I receive? This has not yet been determined yet. It will depend on the number of DuPont shares that you hold in the Scheme on a specified date prior to the Separation (regardless of when or how you acquired them). The final ratio will be disclosed closer to the date of the Separation (1 July 2015). Do I have to pay anything to acquire the Chemours Shares? No, although see later for the tax consequences. Will the number of my DuPont Shares be reduced? The number of DuPont shares that you hold in the Scheme will not be affected by the Separation. However, the value of the DuPont shares may be affected as lon_lib1\ \2 1

2 the DuPont shares are listed on the New York Stock Exchange, and the value of the DuPont shares can go down as well as up based on fluctuations in the market. Q5 A5 Q6 A6 Will my DuPont Shares plus my Chemours Shares together be equal in value to my DuPont Shares before the Separation? Not necessarily. As both DuPont and Chemours will be independent companies whose shares are freely traded on the New York Stock Exchange it is highly unlikely that the aggregate values will exactly match the original value of the DuPont Shares. A number of factors can impact on the price of the shares. Can I receive cash instead? No. However, as you will be entitled to a number of Chemours shares based on a ratio of the number of DuPont shares that are held in the Scheme, you may receive a balancing cash payment if the ratio does not result in a whole number of Chemours shares. For example, if you hold 10 DuPont shares in the Scheme and you will are entitled to 1 Chemours share for every 3 DuPont shares, you would receive 3 Chemours shares and a balancing cash payment equal to the value of one-third of a Chemours share 1. Participation in the Scheme Q7 A7 I participate in the Scheme, is my participation affected by the Separation? This depends on whether you continue to be employed by the DuPont group after the Separation. If you continue to be employed by DuPont after the Separation, your participation in the Scheme is unaffected. You may continue purchasing partnership shares through payroll in the same way that you do currently and you will still be entitled to receive matching shares at the same ratio as currently. Your DuPont shares will still be held by Computershare Plan Managers EES Trustees Limited. If you cease to remain employed by DuPont and instead are employed by Chemours as a result of the Separation, you will be treated in the same way as other leavers from DuPont. You will be required to remove your DuPont shares from the Scheme, and the Trustee will send you a Form of Direction to complete and return. You will be entitled to sell your DuPont shares, or transfer your DuPont shares into the DuPont Share Shop, or you can hold them directly as part 1 These numbers are given by way of illustrative example only and should not be taken as an indication of any likely ratio. lon_lib1\ \2 2

3 of your personal investment strategy. If you do not return your instructions to the Trustee within 30 days, your shares will be removed from the Scheme and placed into the DuPont Share Shop. Q8 A8 Q9 A9 I no longer participate in the Scheme, but hold my DuPont Shares in the DuPont Share Shop. Is my participation affected by the Separation? No, you can continue to hold your DuPont shares in the DuPont Share Shop. Does it make any difference whether my DuPont Shares have been held for more or less than three years? No, the comments on this Q&A apply to your entire holding of share in the Scheme, unless specifically stated otherwise. If you cease to be a DuPont employee and become an employee of the Chemours group and are therefore required to remove your DuPont shares from the Scheme, none of your DuPont shares will be subject to forfeiture. However, please see Q&A13 in relation to dividend shares that have been held for less than three years. Holding Chemours Shares Q10 A10 Q11 A11 Q12 A12 Can I hold my Chemours Shares through the Scheme or DuPont Share Shop? No, only DuPont shares can be held in the Scheme and the DuPont Share Shop. This is as a result of the legislation governing the Scheme and the rules of the DuPont Share Shop, which cannot be changed. How can I hold my Chemours Shares? You can hold your Chemours shares in your own name as part of any investment portfolio. Alternatively DuPont intends to provide a temporary broker arrangement to allow you to sell your Chemours shares after the Separation (see Q&A12 below). Can I sell my Chemours Shares? Your Chemours shares will be listed on the New York Stock Exchange so can be freely traded. DuPont intends to provide a temporary broker arrangement, similar to the DuPont Share Shop, into which you can transfer your Chemours shares. This is intended to make it easier for you to sell your Chemours shares in order to fund your tax charges (see below). The facility will be temporary, most likely terminating at the end of the 2015/16 tax year (i.e. on 5 April 2016), and there may be a cost to you of transferring any Chemours shares out of this broker facility and into your own name if you have not sold all of the Chemours lon_lib1\ \2 3

4 shares held in there when the facility closes. Further details of the temporary broker facility will be provided to you in due course. Taxation (UK) Q13 A13 I will be employed by Chemours after the Separation. Will I have any tax to pay when I withdraw my Shares from the Scheme? You will not pay any income tax or National Insurance on your partnership shares or matching shares or any dividend shares that have been held for more than three years. This is because you have ceased employment as a result of a sale of your employing company from the DuPont group. If you have dividend shares which have been held for less than 3 years, you will be subject to tax as if the dividend which was used to buy those shares was a cash dividend paid at the time that the shares were taken out of the Scheme. You will need to pay this tax to HMRC through your self-assessment tax return for 2015/16, in the same way as any other dividend you receive on investments. For a description of tax payable on dividends see the remainder of this Tax section. Computershare will send you a voucher that you will need to complete your tax returns, or speak to HMRC. If you sell your DuPont shares immediately, there will be no further tax to pay. However, if you decide to keep your DuPont shares, any increase in value of the shares after you withdraw them from the Scheme will be subject to capital gains tax in the same way as any other investment. Q14 A14 Will I pay tax in relation to my Chemours Shares? Yes. All UK tax resident shareholders in DuPont (whether they acquired shares under the Scheme or not) will be taxed on the receipt of their Chemours shares. The Chemours shares are treated for tax purposes as if they were a dividend paid by DuPont, so the value of the Chemours shares on acquisition is taxed as if it were a cash dividend. The tax rates that will apply to the value of the Chemours shares you receive (correct as at May 2015) are set out in the table below. UK taxpayers are generally entitled to a special tax credit equal to one-ninth of the dividend which reduces the tax rate payable as shown below. lon_lib1\ \2 4

5 Tax Band Dividend tax rate Effective Rate (adjusted for dividend tax credit) Basic Rate (i.e. pay income tax on your salary at 20%) Higher Rate (i.e. pay income tax on your salary at 40%) Additional Rate (i.e. pay income tax on your salary at 45%) 10% 0% 32.5% 25% 37.5% 30.56% The taxation of dividends is complicated, but the following example may help you understand this 2. If the value of the Chemours shares you receive is 900, you will receive a dividend tax credit of 100. If you pay tax at 40%, you will calculate your tax at 32.5% of ( ) = 325. You then deduct the tax credit from that giving you a total amount of tax payable of ( ) = 225 (or 25% of 900). Q15 A15 Q16 A16 How is this tax collected? The tax payable on a dividend is not related to your employment but to your relationship to DuPont as shareholder. Therefore it cannot be collected through payroll. You will have to pay this through self-assessment. If you generally file a UK tax return, you will need to declare the dividend on your return for the tax year 2015/16. UK tax returns have to be filed by 31 October 2016 (if paper filing) or 31 January 2017 (if online filing). Tax will be payable by 31 January If you do not currently file a UK tax return, we recommend that you contact HMRC to discuss how to account for any income tax. HMRC s general income tax helpline is , or you can contact your personal tax office if you know it. Will there be any ongoing tax charges? If you hold DuPont shares outside the Scheme or you hold Chemours shares, you will be subject to the same tax rules as if it were any other investment. You will therefore be taxed on any dividends received, or on any capital gain made when you sell the shares that exceeds your annual exempt amount). 2 These numbers are given by way of illustrative example only and should not be taken as an indication of any likely values. lon_lib1\ \2 5

6 Example Q17 Worked Example 3 A17 Assume you have a total value of DuPont shares held in the Scheme or Share Shop of 25,000, which assuming a 1: exchange rate is equal to US$35,070. Also assume that at the time of the Separation, the DuPont share price is $70 and the ratio for the Separation is that each shareholder receives 1 Chemours share for every 5 DuPont shares held. 25,000 is equal to US$35,070. Given a US$70 share price, you therefore hold 501 DuPont shares. The ratio is 1 Chemours share for every 5 DuPont shares held. You will therefore receive 100 Chemours shares (501 5 = 100.2) and a cash balancing payment of 0.2 (20%) of the value of a Chemours share on the date on which the Chemours shares are issued. If the value of each Chemours share on the date on which they are issued is US$15, you have received Chemours shares valued at $1,500 (i.e. 100 x US$15) and a cash payment of $3 (i.e. 20% x US$15). This is equal to 1, and 2.14 respectively (using the same exchange rate as above). Assuming that your cash dividend is not reinvested in DuPont dividend shares under the Scheme, you have therefore received a total dividend of 1, Your dividend tax credit (see Q&A14) is If you pay income tax at 40%, you will calculate your income tax on the dividend at 32.5% of (1, ) = Deducting the tax credit gives you a total income tax payable of (which is 25% of 1,071.43). Please note that you do not have to perform these calculations yourself. DuPont will provide you with a tax voucher informing you of the value of your dividend and your tax credit. You then need to inform HMRC of these figures, and HMRC will calculate your tax payable. Contact Details Q18 A17 How do I contact Computershare if I have any queries? Computershare s contact details are: Dupont@computershare.co.uk 3 These numbers and assumptions are given by way of illustrative example only and should not be taken as an indication of any likely values or exchange rates. lon_lib1\ \2 6

7 Participant Helpline: +44 (0) Employee Web (for username or access issues, contact Computershare): Mailing Address: Computershare Plan Managers Bridgewater Road Bristol BS99 6AP These questions and answers are intended to provide general information and describe certain tax consequences for employees who are resident and domiciled in the UK. However, this Q&A should not be construed as giving personal tax or financial advice. If you are in any doubt as to the financial or tax consequences of the Separation or your holding/receipt of shares in either DuPont or Chemours, you should consult an independent financial or tax advisor. If you have any queries not dealt with here, please contact Computershare on the details set out above. However, please note that neither Computershare nor any employee of the DuPont group will be able to give you tax or financial advice. lon_lib1\ \2 7