Dividends

Dividend dates

What is a dividend?

It is a payment to shareholders, the level of which is based on the company's dividend policy and the number of shares held by shareholders at the record date. It is paid to everyone who holds shares at the record date. It can be paid in cash or used to buy more Tesco shares.

When is it paid?

Tesco currently pays dividends twice a year. The dates are shown in the table above.

What does ex-dividend mean?

Before we announce a dividend, we consult with the Stock Exchange and set the ex-dividend date. If you buy shares before the ex-dividend date, you are entitled to the most recently-announced dividend; if you buy after that date, the dividend goes to the previous owner of the shares.

What does record date mean?

The dividend is paid based on the number of shares held on the share register at the record date, which is two days after the ex-dividend date. If you receive a dividend and are not sure if you are entitled to it, contact the agent who sold your shares for you.

How can I have my dividends paid?

You have the option of:

• having them paid direct to your bank or building society account
• electing to use them to buy more Tesco shares via the Dividend Reinvestment plan
• being sent a cheque to your registered address

If dividends are paid direct to your bank or building society account through the BACS system, it avoids the risk of cheques being lost in the post and your dividend will be in your account on the day the payment is made. The Registrar will send you a tax voucher to confirm the amount and to which account it has been paid.

What is the Dividend Reinvestment Plan?

We operate a Dividend Reinvestment Plan which allows you to reinvest your cash dividends in more Tesco ordinary shares. If you wish to participate, you will need to complete an application form and send it to Equiniti, Aspect House, Spencer Road, Lancing Business Park, Lancing, West Sussex, BN99 6DA.

Alternatively you can join by calling Equiniti Financial Services Limited on 0871 384 2977.

Do I have to pay tax on my dividends?

When you are paid a dividend, you are sent a tax voucher which shows the net amount received and the tax which is deemed to have been paid. On 6 April 1999, the tax credit on dividends was reduced from 20% to 10% of the gross amount.

Your dividends are treated as if they had been paid after the deduction of income tax at the lower rate. In general,

• if you are resident in the UK , and
• if you pay tax at the lower or basic rate, you have no further tax to pay; or
• if you pay tax at a higher rate, you will be taxed at a special rate of 32.5% of the gross dividend. You will need to pay the amount above the 10% tax credit (an additional 22.5%) with your overall tax bill for the year. Keep the voucher in case your tax office wants to see it
• if you do not pay tax, you will not be able to reclaim the tax credit, unless your shares are held in a Personal Equity Plan (PEP), an Individual Savings Account (ISA) or by a charity.

If you sell any of your shares at a profit, you may have to pay capital gains tax.

What should I do if I lose my dividend cheque or tax voucher?

Contact Equiniti as soon as possible and confirm which payment has been lost.

They will stop the cheque and will issue a replacement, there may be an administration charge for issuing a duplicate.

Dividend cheques are currently valid for one year from the date of payment. After this time, return any uncashed cheques to the Registrar; they will issue a replacement. There may be an administration charge for this service.

If you lose your tax voucher, contact Equiniti, detailing which voucher(s) have been lost. They will issue you with duplicates on payment of an administration charge.