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Payment of Dividends
Dividends are normally paid in July and December each year. You will automatically receive your dividends in cash unless you have given notice that you wish to participate in the DRP.
You have the flexibility to receive all or part of your dividends in cash.
Cheque or Direct Credit
Dividends paid in cash can be received:
- by cheque (sent to your registered address); or
- by direct credit (currently, this facility is only available for shareholders in Australia, New Zealand and the United Kingdom). More information on the direct credit facility is set out below.
If you do not participate in the DRP you will receive your dividends in cash.
It is possible to receive United Kingdom sourced dividends (paid in cash in pounds sterling) through participating in the U.K. Dividend Plan. This enables shareholders resident in the United Kingdom to obtain the benefit of a tax credit as a result of that country's tax system.
Accounts that you can nominate for the Direct Credit Facility
Australian shareholders
Dividends can be paid to an account at an Australian branch of any bank, building society or credit union and will be paid into those accounts in Australian currency.
New Zealand and United Kingdom shareholders
Dividends can be paid into an account operated at a New Zealand or United Kingdom branch of any bank. The dividends will be paid in New Zealand or United Kingdom currency (as applicable).
The conversion rate is set in advance on the relevant record date.
Benefits of the Direct Credit Facility
- There is no risk of your cheque being lost or stolen.
- Your dividend is paid directly to your nominated account and you do not have to worry about any postal delays.
- A dividend statement is sent to your registered address at the time of each payment, which sets out the amount paid into your account and the imputation details.
- For shareholders in New Zealand and the United Kingdom, using the direct credit facility removes the cost of converting Australian currency cheques into your local currency.
Tax
Australian resident shareholders
Any cash dividend you receive forms part of your Australian taxable income. The dividend may also be fully or partly franked under Australia's dividend imputation system. Any franking credits attached to the dividend also form part of your Australian taxable income. However, you are generally entitled to a rebate of tax based on the franking credits attached to the dividend.
The cash dividend option may appeal to you if you are able to take advantage of any franking credits that may be attached to the dividend and if you require a regular income from your investment in the National. The Directors of the National anticipate that, in the normal course of events, dividends will be fully or partly franked.
Non-Australian resident shareholders
You will generally be subject to Australian dividend withholding tax on the unfranked part of the dividend. However, you will not be subject to Australian dividend withholding tax on the unfranked part of the dividend to the extent that it is designated as 'conduit foreign income' by the National, or on the franked part of the dividend. The extent to which the dividend is designated as conduit foreign income will be included on each relevant dividend statement. The dividend is not otherwise subject to tax in Australia and you will be unable to use any franking credits attached to it.
The National can also attach New Zealand imputation credits to dividends paid. As a general rule, New Zealand imputation credits are only relevant for shareholders who are required to file New Zealand income tax returns. To enable shareholders to obtain the benefit of New Zealand imputation credits, a dividend statement will be sent to those shareholders with a registered address in New Zealand detailing the New Zealand imputation credits attached.
This discussion deals mostly with the Australian tax consequences for shareholders residing outside of Australia. You should seek independent tax advice in respect of the tax treatment of cash dividends in your country of residence.
Terms and Conditions of the Plans comprising the National's Dividend Package
It is not intended the above information provide definitive financial or taxation advice. Shareholders should choose their form of dividend with care having regard to their individual circumstances. Shareholders uncertain as to which dividend option is best for them are strongly advised to consult their own financial, taxation or legal adviser.
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