RNS Number : 8297S
UK Select Trust Limited
25 November 2011
UK SELECT TRUST LIMITED
Registered No: 475
25 November 2011
Notice of Extraordinary General Meeting
The Company will post a circular to shareholders today which contains (i) information on the payment of scrip dividends out of realised capital reserves, (ii) details of proposals to amend the Company's memorandum of incorporation (the "Memorandum") and to adopt new articles of incorporation (the "New Articles") and (iii) a notice convening an extraordinary general meeting of the Company for 10.30 a.m. on 16 December 2011 (the "EGM") at which special resolutions to amend the Memorandum and adopt the New Articles will be proposed (the "Circular").
Position for Shareholders resident in Guernsey
At present, Shareholders who are resident in Guernsey for tax purposes are able to benefit from a concession granted by the States of Guernsey Income Tax Office so that dividends paid in the form of scrip issued by the Company are treated as not subject to taxation in Guernsey. The published Statement of Practice dealing with scrip dividends is currently under review by the States of Guernsey Income Tax Office and it is anticipated that it will be revised to the effect that scrip dividends will generally be treated as income in the hands of any Guernsey resident Shareholders, and therefore subject to taxation in Guernsey. However, different treatment may be granted in certain circumstances.
The review of the relevant Statement of Practice is ongoing but in the meantime the Company has actively sought clarification from the States of Guernsey Income Tax Office about the impact of its proposals upon the tax liability of Guernsey resident Shareholders. The Director of Income Tax has confirmed that if the Company is able to demonstrate that the scrip issue is funded from capital reserves, the receipt of the scrip dividend would be regarded as capital in the hands of a Guernsey resident Shareholder. In order to demonstrate that a scrip dividend is funded from capital reserves, the Director of Income Tax has confirmed that he will accept the audited financial statements of the Company as evidence of the source of payment if these clearly demonstrate that the scrip dividend is paid out of the Company's capital reserves. The Director has also confirmed that he would not invoke the general anti-avoidance provisions in Guernsey's income tax legislation to override this treatment.
The proposed New Articles will remove the current prohibition against the Company using its capital reserves for certain purposes, including the payment of dividends, and will thereby make it possible for the Company under Guernsey company law to fund scrip dividends from its capital reserves.
Position for Shareholders resident outside Guernsey
For Shareholders who are not resident in Guernsey for tax purposes, distributions by the Company, whether in the form of scrip or cash, are currently paid without deduction of Guernsey income tax. The proposed New Articles will not affect this.
Proposed Amendments to the Memorandum and Adoption of New Articles
The Companies (Guernsey) Law, 2008 came into effect on 1 July 2008 and all Guernsey companies are required to adopt articles of incorporation which comply with that Law by 1 July 2012. The amendment to the Memorandum and adoption of New Articles is being proposed primarily to comply with that Law and to enable the Company to fund any scrip dividend from capital reserves.
The Circular sets out details of the changes that will be made if the special resolutions to amend the Memorandum and adopt the New Articles are passed at the EGM. The full terms of the Memorandum as proposed to be amended and the New Articles will be available for inspection until the close of the EGM at Dorey Court, Admiral Park, St Peter Port, Guernsey GY1 3BG.
Availability of Circular
A copy of the Circular will be submitted to the National Storage Mechanism and will shortly be available for inspection at www.hemscott.com/nsm.do. Copies of the Circular will also be available to download from the Investment Manager's web site at www.swip.com shortly.
For further information please contact:
Kleinwort Benson (Channel Islands) Fund Services Limited
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