Dividend Currency Conversion Announcement

Hammerson plc (the 'Company')

Dividend Currency Conversion Announcement - Dividend No. 138

4 March 2020

On 25 February 2020, the Board of Directors of the Company proposed a final dividend of GBP 14.8 pence per share for the period ended 31 December 2019 ("the Dividend"), subject to approval by the shareholders of the Company at the Annual General Meeting to be held on Tuesday, 28 April 2020. 

The Dividend will be subject to a 20% UK withholding tax unless exemptions apply.  It will be treated as a Property Income Distribution ("PID"), net of withholding tax where appropriate.

The Company will not be offering a scrip dividend alternative, but for shareholders who wish to receive their dividend in the form of shares, the Dividend Reinvestment Plan ("DRIP") will be available.

The Dividend is payable on Thursday, 30 April 2020 to shareholders registered on the UK principal register ("UK Shareholders") and the South African branch register ("SA Shareholders") who have elected to receive the Dividend in cash.  The Record Date for both UK Shareholders and SA Shareholders is at the close of business on Friday, 20 March 2020. The DRIP purchases settlement date (subject to market conditions and the purchase of shares in the open market) is Monday, 4 May 2020 in the UK and Wednesday, 6 May 2020 in South Africa. 

The Dividend should be regarded as a "foreign dividend" for SA income and SA dividend tax purposes.

Shareholders receiving the Dividend in cash

The Company confirms that the South African Rand exchange rate for the Dividend will be ZAR 19.7816 to GBP 1.  The Dividend is payable in South African Rand to SA Shareholders.  Shareholders who do not elect the DRIP will be paid as follows:

*Net position after SA Shareholders have claimed back 5% from HMRC under the double tax agreement between the United Kingdom and South Africa.

** Before SA shareholders have claimed back 5% from HMRC under the double tax agreement between the United Kingdom and South Africa.

Cash PIDs

A 20% UK withholding tax will be deducted from cash PIDs. The Company will account to Her Majesty's Revenue & Customs ("HMRC") in sterling for the total UK withholding tax deducted.

SA dividends tax, at the rate of 20%, will apply to cash PIDs payable by the Company unless the beneficial owner of the Dividend is exempt from SA dividends tax (e.g. if it is a South African resident company). Under the double tax agreement between the UK and South Africa ("the DTA"), the maximum tax payable in the UK is 15%.  South African resident shareholders are therefore entitled to claim the excess of 5% from HMRC.  As SA Shareholders are entitled to reclaim this excess from HMRC, the maximum rebate allowable in respect of the UK withholding tax against the SA dividends tax is 15%, which means that the Company will have to withhold a further 5% from the Dividend in South Africa to bring the total dividends tax to 20%.  In summary, therefore, 20% will be withheld in the UK, a further 5% will be withheld in South Africa (where appropriate), but South African resident shareholders will be entitled to claim back 5% from HMRC, which will bring the overall total to 20%.

Shareholders electing the DRIP

SA Shareholders electing the DRIP should note that, in respect of fractional entitlements that may arise, all allocations of shares will be rounded down to the nearest whole number, and any residual amounts that are not used to reinvest in shares (as a result of rounding down) will be paid out to these SA Shareholders in cash.

It is the Company's understanding that the residual cash paid to SA Shareholders who have made DRIP elections would already have been taxed prior to the calculation of the number of shares and any residual cash owing to such SA Shareholders.  Accordingly, no further tax should be payable on the cash paid to SA Shareholders as a result of any fractional entitlements.

The above information and the guidelines on the taxation of dividends are provided as a general guide based on the Company's understanding of the law and practice currently in place.  Any shareholder who is in any doubt as to their tax position should seek independent professional advice.

For further information contact:

Julia Crane

Deputy Company Secretary

Tel: +44 (0)20 7887 1000

The announcement above has also been released on the SENS system of the Johannesburg Stock Exchange.