Investec: and Investec Limited – Tax Cost and Payout Ratio







Investec plc and Investec Limited - Tax Cost and Apportionment Ratio

Investec plc                                                  Investec Limited
(Incorporated in England and Wales                            (Incorporated in South Africa
With registered number 3633621)                               with registered number 1925/002833/06)
LSE share code: INVP                                          JSE share code: INL
JSE share code: INP                                           NSX share code: IVD
ISIN: GB00B17BBQ50                                            BSE share code: INVESTEC
LEI: 2138007Z3U5GWDN3MY22                                     ISIN: ZAE000081949
                                                              LEI: 213800CU7SM6O4UWOZ70


NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION.


As part of the dual listed company structure, Investec plc and Investec Limited (jointly "Investec") notify both the London
Stock Exchange (the "LSE") and the Johannesburg Stock Exchange (the "JSE") of matters which are required to be
disclosed under the Disclosure Guidance and Transparency Rules and the Listing Rules of the Financial Conduct Authority
and/or the JSE Listings Requirements.

Accordingly, we advise of the following:

INVESTEC PLC AND INVESTEC LIMITED
TAX COST AND APPORTIONMENT RATIO


Defined terms used but not otherwise defined in this announcement have the meanings set out in the shareholder circular
published by Investec on 18 March 2022 (the "Circular").

1.   INTRODUCTION

     Shareholders are referred to the announcement released by Investec on 31 May 2022 confirming that, following
     the delivery of the Scheme Court Order to the Registrar of Companies, the Distribution became effective as of
     7.00 p.m. (London time) / 8.00 p.m. (Johannesburg time) on Monday, 30 May 2022.

     The purpose of this announcement is to advise Investec Shareholders of the ratio in which the expenditure
     incurred (and/or the market value) of the Investec shares must be apportioned pursuant to section 46(3)(a) of
     the South African Income Tax Act (the "Act").

     Shareholders are reminded that the unbundling was executed by Investec Limited using a distribution ratio of:

           (i) 1 : 0.13751 meaning that for every 1 Investec Limited Ordinary Share held at the Distribution Record
                Time, an Investec Limited Ordinary Shareholder is entitled to 0.13751 of a Ninety One Limited Share;
                and
           (ii) 1 : 0.13751 meaning that for every 1 Investec plc Ordinary Share held on the Investec plc SA Register
                at the Distribution Record Time, an Investec plc Ordinary Shareholder on the Investec plc SA Register
                is entitled to 0.13751 of a Ninety One Limited Share.

     As outlined in paragraphs 3.1 and 3.2 of Part VI of the Circular, an entitlement to a fraction of a Ninety One
     Limited share will arise for all Investec Limited Ordinary Shareholders and all Investec plc Ordinary
     Shareholders on the Investec plc SA Register at the Distribution Record Time. Shareholders will receive a cash
     payment equivalent to the fraction of a Ninety One Share to which they otherwise would have been entitled.
     Further detail with respect to cash proceeds in respect of fractional entitlements is outlined in the
     announcement released by Investec on 27 May 2022.


2.   APPORTIONMENT TAX PRINCIPLES

     Investec Limited Ordinary Shares and/or Investec plc Ordinary Shares held on the Investec plc SA Register held
     as trading stock
     Any Investec Limited Ordinary Shareholder holding Investec Limited Ordinary Shares as trading stock and/or
     any Investec plc Ordinary Shareholder on the Investec plc SA Register holding Investec plc Ordinary Shares held
     on the Investec plc SA Register as trading stock will be deemed to acquire the unbundled Ninety One Limited
     Shares as trading stock or on revenue account, as the case may be.

     The combined expenditure of such Investec Limited Ordinary Shares and/or Investec plc Ordinary Shares held
     on the Investec plc SA Register and unbundled Ninety One Limited Shares will be the amount taken into account
     by the Investec Limited Ordinary Shareholder and/or the Investec plc Ordinary Shareholder on the Investec plc
     SA Register in respect of those shares, as contemplated in section 11(a), section 22(1), or section 22(2) of the
     Act (tax cost).

     The portion of the above combined expenditure to be allocated to the unbundled Ninety One Limited Shares
     will be determined by applying the ratio that the market value of the unbundled Ninety One Limited Shares
     bears to the sum of the market value of the Investec Limited Ordinary Shares and/or Investec plc Ordinary
     Shares held on the Investec plc SA Register and the unbundled Ninety One Limited Shares as at the last day to
     trade plus one Business Day, being Thursday, 26 May 2022. The expenditure so allocated to the unbundled
     Ninety One Limited Shares will reduce the expenditure relating to the retained Investec Limited Ordinary
     Shares and/or Investec plc Ordinary Shares held on the Investec plc SA Register, as applicable.

     Investec Limited Ordinary Shares and/or Investec plc Ordinary Shares held on the Investec plc SA Register held
     as capital assets
     Any Investec Limited Ordinary Shareholder holding Investec Limited Ordinary Shares as capital assets and/or
     any Investec plc Ordinary Shareholder on the Investec plc SA Register holding Investec plc Ordinary Shares held
     on the Investec plc SA Register as capital assets will be deemed to acquire the unbundled Ninety One Limited
     Shares as capital assets.

     The combined expenditure of such Investec Limited Ordinary Shares and/or Investec plc Ordinary Shares held
     on the Investec plc SA Register and unbundled Ninety One Limited Shares will be the original expenditure
     incurred in respect of the Investec Limited Ordinary Shares and/or Investec plc Ordinary Shares held on the
     Investec plc SA Register, that is allowable in terms of paragraph 20 of the Eighth Schedule to the Act, and where
     the Investec Limited Ordinary Shares and/or Investec plc Ordinary Shares held on the Investec plc SA Register
     were acquired before 1 October 2001, the expenditure and/or market value, as the case may be, adopted or
     determined as contemplated in paragraph 29 of the Eighth Schedule to the Income Tax Act (tax cost).

     The portion of the above combined expenditure to be allocated to the Ninety One Limited Shares will be
     determined by applying the ratio that the market value of the Ninety One Limited Shares, bears to the sum of
     the market value of the Investec Limited Ordinary Shares and/or Investec plc Ordinary Shares held on the
     Investec plc SA Register and the Ninety One Limited Shares as at the last day to trade plus one Business Day,
     being Thursday, 26 May 2022, taking the distribution ratio into account. The expenditure and/or market value,
     as the case may be, so allocated to the Ninety One Limited Shares will reduce the expenditure and/or market
     value, as the case may be, of the retained Investec Limited Ordinary Shares and/or Investec plc Ordinary Shares
     held on the Investec plc SA Register, as applicable.

     Investec Limited Ordinary Shareholders

     In terms of section 46(3)(a) of the Act, Investec Limited Ordinary Shareholders must allocate a portion of the
     expenditure and market value (as defined in section 46(3)(b)) attributable to the Investec Limited Ordinary
     Shares to the Ninety One Limited Shares acquired and reduce the expenditure and market value attributable
     to the Investec Limited Ordinary Shares by the amount so allocated. The allocated portion of the tax cost of
     the Investec Limited Ordinary Shares is an amount which bears to such tax cost the same ratio that the market
     value of the Ninety One Limited Shares on the last day to trade plus one Business Day bears to the sum of the
     market values of:

          (i) the closing share price of Ninety One Limited Shares on the last day to trade plus one Business Day;
              and
         (ii) the closing share price of Investec Limited Ordinary Shares on the last day to trade plus one Business
              Day.

     Investec plc Ordinary Shareholders on the Investec plc SA Register

     In terms of section 46(3)(a) of the Act, Investec plc Ordinary Shareholders on the Investec plc SA Register must
     allocate a portion of the expenditure and market value (as defined in section 46(3)(b)) attributable to the
     Investec plc Ordinary Shares held on the Investec plc SA Register to the Ninety One Limited Shares acquired
     and reduce the expenditure and market value attributable to the Investec plc Ordinary Shares held on the
     Investec plc SA Register by the amount so allocated. The allocated portion of the tax cost of the Investec plc
     Ordinary Shares held on the Investec plc SA Register is an amount which bears to such tax cost the same ratio
     that the market value of the Ninety One Limited Shares on the last day to trade plus one Business Day bears to
     the sum of the market values of:
           (i) the closing share price of Ninety One Limited Shares on the last day to trade plus one Business Day;
               and
          (ii) the closing share price of Investec plc Ordinary Shares held on the Investec plc SA Register on the last
               day to trade plus one Business Day.

     In terms of section 46(7) of the Act, the relief provided for in terms of section 46 would not apply for Investec
     Limited or the relevant shareholder where shares are distributed to any shareholder that is: (i) a "disqualified
     person"; and (ii) holds at least 5% of the equity shares in Investec Limited immediately before the unbundling
     transaction.

     In relation to non-South African tax resident Investec Limited Ordinary Shareholders and Investec plc Ordinary
     Shareholders on the Investec plc SA Register, the tax cost of the Ninety One Limited Shares will only be relevant
     for shareholders who have a permanent establishment in South Africa.

3.   TAX COST AND APPORTIONMENT RATIO CALCULATION

     Investec Limited Ordinary Shareholders
     For purposes of the tax cost apportionment calculation of the Ninety One Limited Shares in the hands of the
     Investec Limited Ordinary Shareholders for tax purposes, the closing price of one Ninety One Limited Share as
     at 26 May 2022 is ZAR44.64 and the closing price of one Investec Limited Ordinary Share as at 26 May 2022 is
     ZAR89.20.

     The expenditure to be allocated by each Investec Limited Ordinary Shareholder to the Ninety One Limited shares
     must be determined as follows:
     A = (B × (C / (C+D))
     Where:
     A = expenditure of a Ninety One Limited share;
     B = Investec Limited Ordinary Shareholder's expenditure, as defined in section 46(3)(b)(i) and (ii)(1) plus the
         amount defined in section 46(3)(b)(iii) (2), i.e. Investec Limited's tax liability, being ZAR0.0347 per share;
     C = closing share price of an unbundled Ninety One Limited share on the last day to trade plus one Business
         Day multiplied by the distribution ratio, i.e. ZAR6.1384 (being ZAR44.64 x 0.13751); and
     D = the closing share price of an Investec Limited Ordinary share on the last day to trade plus one Business
         Day, i.e. ZAR89.20.

     The Apportionment Ratio in respect of the tax cost allocations have therefore been calculated as follows:
          (i)  Ninety One Limited Share: 6.4386%
          (ii) Investec Limited Ordinary Share: 93.5614%
          

     Accordingly, Investec Limited Ordinary Shareholders are hereby advised that the expenditure in respect of the
     Ninety One Limited Shares received is determined as follows:

     A = B x Apportionment Ratio
     Where:
     A = expenditure of Ninety One Limited share;
     B = Investec Limited Ordinary Shareholder's expenditure, as defined in section 46(3)(b)(i) and (ii) plus
         ZAR0.0347per share;
     Apportionment Ratio = 6.4386%

     The remaining expenditure must therefore be allocated to the remaining Investec Limited Ordinary Shares still
     held.

     Ordinary Shareholders on the Investec plc SA Register

     For purposes of the tax cost apportionment calculation of the Ninety One Limited Shares in the hands of the
     Investec plc Ordinary Shareholders on the Investec plc SA Register for tax purposes, the closing price of one
     Ninety One Limited Share as at 26 May 2022 is ZAR44.64 and the closing price of one Investec plc Ordinary
     Share on the Investec plc SA Register as at 26 May 2022 is ZAR88.25.

     The expenditure to be allocated by each Investec plc Ordinary Shareholder on the Investec plc SA Register to the
     Ninety One Limited shares must be determined as follows:
     A = (B × (C / (C+D))
     Where:
     A = expenditure of Ninety One Limited share;
     B = Investec plc Ordinary Shareholder on the Investec plc SA Register's expenditure, as defined in section
         46(3)(b)(i) and (ii)(3) plus the amount defined in section 46(3)(b)(iii)(4), i.e. Investec Limited's tax liability, being
         ZAR0.0528 per share;
     C = closing share price of an unbundled Ninety One Limited share on the last day to trade plus one Business
         Day multiplied by the distribution ratio, i.e. ZAR6.1384 (being ZAR44.64 x 0.13751); and
     D = the closing share price of an Investec plc Ordinary share on the SA Register on the last day to trade plus
         one Business Day, i.e. ZAR88.25.

     The Apportionment Ratio in respect of the tax cost allocations have therefore been calculated as follows:
           (i) Ninety One Limited Share: 6.5034%
          (ii) Investec Ordinary plc Share on the Investec plc SA Register: 93.4966%

     Accordingly, Investec plc Ordinary Shareholders on the Investec plc SA Register are hereby advised that the
     expenditure in respect of the Ninety One Limited Shares received is determine as follows:

     A = B x Apportionment Ratio
     Where:
     A = expenditure of Ninety One Limited share;
     B = Investec plc Ordinary Shareholders on the Investec plc SA Register's expenditure, as defined in section
         46(3)(b)(i) and (ii) plus ZAR0.0538 per share;
     Apportionment Ratio = 6.5034%

     The remaining expenditure must therefore be allocated to the remaining Investec plc Ordinary Shares on the
     Investec plc SA Register still held.


     For simplicity and illustrative purposes, please see the below example of the application of Apportionment
     Ratio calculation:

     Application of Apportionment Ratio calculation                                           Amount
     Number of Investec Limited Ordinary Shares held                                               1
     Base cost per share in hands of Investec Limited Ordinary Shareholder in
     terms of part (i) and (ii) of the definition of "expenditure" in section 46(3)(b)       ZAR35.00
     Amount to be added to base cost per share in terms of part (iii) of the
     definition of "expenditure" in section 46(3)(b)                                        ZAR0.0347
     New base cost per Investec Limited Ordinary Share before section 46
     unbundling                                                                              ZAR35.03



     Value attributable to Investec Limited Ordinary
     Shares following section 46 unbundling                            Ratio               Allocation
     Ninety One Limited Allocation (*)                               6.4386%                  ZAR2.26
     Investec Limited Allocation                                    93.5614%                 ZAR32.78
                                                                     100.00%                 ZAR35.03

* Considering the distribution ratio and the facts contained in the simplistic example above, the Investec Limited
  Ordinary Shareholder would allocate ZAR2.26 to 0.13751 of a Ninety One Limited share received. Stated differently the
  Investec Limited Ordinary Shareholder would need to allocate ZAR16.40418 to a Ninety One Limited share received



Footnotes:
(1) "expenditure" means in relation to unbundled shares acquired as-
       (i)  trading stock, the amount taken into account prior to the unbundling transaction in respect of the unbundling shares for the purposes of
            section 11 (a) or 22 (1) or (2);
       (ii) capital assets, the expenditure incurred prior to the unbundling transaction in respect of the unbundling shares that is allowable in terms
            of paragraph 20 of the Eighth Schedule; and

(2) "expenditure" means in relation to unbundled shares acquired as-
       (iii) the amount which bears to the tax paid by the unbundling company of any equity share in respect of which this section does not apply as
             contemplated in subsection (7) the same ratio as the number of equity shares held by a shareholder that acquires unbundled shares in terms
             of an unbundling transaction in an unbundling company bears to the number of all the issued equity shares in that unbundling company
             immediately before that unbundling transaction;

(3) Refer to footnote 1

(4) Refer to footnote 2



Johannesburg and London
Date: 2 June 2022


Financial Advisor and Transaction sponsor
Investec Bank Limited


Legal/ Tax advisors
ENS Africa and Linklaters LLP

Enquiries:
Mr David Miller
Investec plc
Company Secretary
Tel: + 44 (0)20 7597 4000

Date: 02-06-2022 07:05:00
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Disclaimer

Investec Limited published this content on June 02, 2022 and is solely responsible for the information contained therein. Distributed by Audienceunedited and unmodified, on Jun 02, 2022 05:21:05 UTC.

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5,519 million
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capi. / Sales 2022 2.36x
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# of employees 8,300
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