United States passive foreign investment
company rules
A non-US corporation, such as PLC, will be a PFIC, for US federal income
tax purposes, if, in any particular taxable year, either (i) 75% or more of its
gross income for such year consists of certain types of ’passive’ income
or (ii) 50% or more of the value of its assets (generally determined on the
basis of a quarterly average) during such year produce or are held for the
production of passive income. Passive income generally includes, among
other things, dividends, interest, rents, royalties and net gains from the
disposition of assets that give rise to such income. We will be treated as
owning a proportionate share of the assets and earning a proportionate
share of the income of any other corporation in which we own, directly
or indirectly, 25% or more (by value) of the stock.
The determination of whether we will be or become a PFIC will depend, in
part, on the composition of our income and assets. Because our PFIC status
for any taxable year is a factual determination that can be made only after
the close of a taxable year, there can be no assurance that we will not be
a PFIC for the current taxable year or any future taxable year. If we are a
PFIC for any year during which a US person holds our ADSs or shares, we
generally will continue to be treated as a PFIC with respect to such US
person for all succeeding years during which such US person holds our
ADSs or shares.
Based on our income, assets and activities, we do not believe that we
were a PFIC for the taxable year ending 31 December 2025 and we do
not expect to be classified as a PFIC in the foreseeable future. Because
the determination as to whether or not we are a PFIC is a factual
determination made at the close of the applicable tax year, there can
be no assurance that we will not be a PFIC for the current taxable year, or
any past or future taxable years. Although we do not anticipate becoming
a PFIC, changes in the nature of our income or assets, or fluctuations in the
market price of our ADSs, may cause us to become a PFIC for the current
taxable year and future taxable years.
If we are a PFIC for any taxable year during which a US person holds our
ADSs or shares, and unless the US person makes a mark-to-market election
(as described below), the US person will generally be subject to special tax
rules that have a penalising effect, regardless of whether we remain a
PFIC, for subsequent taxable years, on (i) any excess distribution that we
make to the US person (which generally means any distribution paid
during a taxable year that is greater than 125% of the average annual
distributions paid in the three preceding taxable years or, if shorter, the US
person’s holding period for the ADSs or shares), and (ii) any gain realised
on the sale or other disposition, including, under certain circumstances, a
pledge, of ADSs or shares. Under the PFIC rules:
■ the excess distribution or gain will be allocated ratably over such
holder’s holding period for the shares or ADSs;
■ amounts allocated to the current taxable year and any taxable years in
such holder’s holding period prior to the first taxable year in which we
are classified as a PFIC (a ‘pre-PFIC year’) will be taxable as ordinary
income; and
■ amounts allocated to each prior taxable year, other than the current
taxable year or a pre-PFIC year, will be subject to tax at the highest tax
rate in effect applicable to such holder for that year, and such amounts
will be increased by an additional tax equal to interest on the resulting
tax deemed deferred with respect to such years.
If we are a PFIC for any taxable year during which a US person holds our
ADSs or shares and any of our non-US subsidiaries is also a PFIC, such US
person would be treated as owning a proportionate amount (by value) of
the shares of the lower-tier PFIC for purposes of the application of these
rules. US persons should consult their tax advisers regarding the
application of the PFIC rules to any of our subsidiaries.
As an alternative to the foregoing rules, a US person who holds
‘marketable stock,’ which is stock that is traded in other than de minimis
quantities on at least 15 days during each calendar quarter (‘regularly
traded’) on a qualified exchange or other market as defined in applicable
Treasury Regulations, in a PFIC may make a mark-to-market election with
respect to such stock. For those purposes, our ADSs, but not our shares,
are listed on the New York Stock Exchange, which is a qualified exchange.
We anticipate that our ADSs should qualify as being regularly traded, but
no assurances may be given in this regard. Because a mark-to-market
election technically cannot be made for any lower-tier PFICs that a PFIC
may own, a US person who makes a mark-to-market election with respect
to our ADSs will generally continue to be subject to the PFIC rules with
respect to such US person’s indirect interest in any investments held by
us that are treated as an equity interest in a PFIC for US federal income
tax purposes.
If a US person makes a mark-to-market election with respect to our
ADSs, the US person generally will (i) include as ordinary income for each
taxable year that we are a PFIC the excess, if any, of the fair market value
of ADSs held at the end of the taxable year over the adjusted tax basis
of such ADSs and (ii) deduct as an ordinary loss the excess, if any, of the
adjusted tax basis of the ADSs over the fair market value of such ADSs
held at the end of the taxable year, but only to the extent of the net
amount previously included in income as a result of the mark-to-market
election. The US person’s adjusted tax basis in the ADSs would be adjusted
to reflect any income or loss resulting from the mark-to-market election.
Further, in each year that we are a PFIC, any gain recognised upon the sale
or other disposition of the ADSs will be treated as ordinary income and
any loss will be treated as ordinary loss (but only to the extent of the net
amount previously included in income as a result of the mark-to-market
election). If a US person makes a mark-to-market election it will be
effective for the taxable year for which the election is made and all
subsequent taxable years unless the ADSs are no longer regularly traded
on a qualified exchange or the IRS consents to the revocation of the
election. It should also be noted that it is intended that only the ADSs
and not the shares will be listed on the New York Stock Exchange.
Consequently, if a US person holds shares that are not represented by
ADSs, such holder generally will not be eligible to make a mark-to-market
election if we are or were to become a PFIC.
If a US person makes a mark-to-market election in respect of a PFIC and
such corporation ceases to be a PFIC, the US person will not be required to
take into account the mark-to-market gain or loss described above during
any period that such corporation is not a PFIC.
We do not intend to provide information necessary for US persons to make
qualified electing fund elections, which, if available, would result in tax
treatment different from (and generally less adverse than) the general tax
treatment for PFICs described above.
If a US person owns our ADSs or shares during any taxable year that we
are a PFIC, such holder would generally be required to file an annual IRS
Form 8621. Each US person should consult its tax adviser regarding the US
federal income tax consequences of, and reporting requirements related
to, the ownership and disposition of the ADSs or our shares if we are or
become a PFIC.
UK inheritance tax
Subject to certain provisions relating to trusts or settlements, under the
current estate and gift tax convention between the United States and the
United Kingdom, shares or ADSs held by an individual who is:
■ domiciled for the purposes of the convention in the United States; and
■ not for the purposes of the convention a national (as defined in the
convention) of, or domiciled in, the United Kingdom
will generally not be subject to United Kingdom inheritance tax on the
individual’s death (whether such shares or ADSs were held by the
individual on the date of death or gifted during the individual's lifetime).
An exception is if the shares or ADSs are part of the business property of a
permanent establishment of the shareholder or ADS holder in the United
Kingdom or, in the case of a shareholder or ADS holder who performs
independent personal services, pertain to a fixed base situated in the
United Kingdom.
Where shares or ADSs are subject to United Kingdom inheritance tax and
United States federal gift or federal estate tax, the amount of the tax paid
in one jurisdiction can generally be credited against the tax due in the
other jurisdiction.
Where a United Kingdom inheritance tax liability is prima facie not payable
by virtue of the convention, under the convention, that tax can become
payable if any applicable federal gift or federal estate tax on the shares or
ADSs in the United States is not paid.
From 6 April 2025, United Kingdom inheritance tax is charged based on
whether an individual is a long-term United Kingdom resident for the
purposes of the United Kingdom inheritance tax rules, instead of whether
an individual is domiciled or deemed to be domiciled in the United
Kingdom. Under the rules applicable from 6 April 2025, an individual will
generally be regarded as a long-term United Kingdom resident for the
purposes of the United Kingdom inheritance tax rules if they have been
resident in the UK for at least 10 of the previous 20 years.
The interaction between the UK inheritance tax rules applicable from 6
April 2025 and the convention is complex. Further, overall exposure to
United Kingdom inheritance tax, including any opportunities to utilise the
convention to manage tax credits and avoid double taxation, will be
dependent on the specific circumstances of each shareholder or ADS
holder. Shareholders and ADS holders should therefore consult their own
professional advisers regarding the application of these rules to their
particular circumstances.
UK stamp duty and stamp duty reserve tax
The statements in this section are intended as a general guide to the
current United Kingdom stamp duty and stamp duty reserve tax (’SDRT’)
position. Special rules apply to certain transactions such as transfers of the
shares to a company connected with the transferor and those rules are
not described below. Investors should also note that certain categories
of person are not liable to stamp duty or SDRT and others may be liable
