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Current share price:

£24.37

On 22 September 2017
16:41

£ to 4 dec. places: £24.3650

 

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Share Incentive Plan

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The Share Incentive Plan (SIP) is an HM Revenue & Customs approved plan that includes Freeshares, Sharepurchase and Sharematch. It is open only to employees based in the UK who are paying UK income tax.

Freeshares

Freeshares are awarded to employees and this normally happens annually. The number of shares awarded is based on a percentage of your salary as at 30 June. This percentage is dependant on the profits of Diageo and is announced when Diageo announces its annual results.

To receive Freeshares you must complete an application form. More information about the FY17 Freeshares award can be found in the Understanding Freeshares Factsheet.  

Freeshares cannot be sold until they have been held for three years. However, there will be income tax and National Insurance to pay. It is only after they have been held for five years that they can be sold without deduction of income tax and National Insurance. All shares awarded under Freeshares are included when dividends are paid by Diageo plc.

Any increase in value of shares while they are held in the SIP is free from Capital Gains Tax.

If you have already elected to participate in Freeshares, there is no need to complete a new form.

Sharepurchase

Sharepurchase is an easy way to buy shares in Diageo plc from your pre-tax salary.

You can currently contribute between a minimum of £10 and maximum of £125 per month. This is going to change and from July 2017 payroll deductions, the maximum limit you can choose to contribute will increase from £125 to £150. Your deduction is taken from your pre-tax salary and subject to a maximum of 10% of your monthly salary. The plan is flexible, so you can stop paying monthly contributions at any time and even vary your monthly contribution.

The shares are purchased on the tenth day of every month or the next business day after.  For every two shares you purchase the company will award you one share free (Sharematch). The shares are purchased in the stock market at the price at the time of dealing. The purchase price is announced on this website shortly after the purchase. There is no commission charged on the shares that are bought.

Shares are purchased from your pre-tax salary. Therefore, if you are a basic rate taxpayer every £1 you contribute only costs you 80 pence. If you are a higher rate tax payer, every £1 you contribute only costs you 60 pence (or 55 pence, if you are an additional rate tax payer).

All shares bought under Sharepurchase and Sharematch are included when dividends are paid by Diageo plc.

Contributing to Sharepurchase does not prevent you from saving under a Sharesave Plan. You can join both.

Any increase in value of shares while they are held in the SIP is free from Capital Gains Tax.

If you wish to make contributions please complete a Join form.

Sharematch

Sharematch is linked to Sharepurchase. For every two Diageo shares you buy under Sharepurchase, you will be awarded one extra Diageo share free under Sharematch - Buy two, get one free!

If you sell the Sharepurchase shares before they are three years old, you will forfeit the corresponding Sharematch shares that were awarded.

Leaving the Company

If you leave the company all shares (Freeshares, Sharepurchase and Sharematch) must come out of the SIP.

If you resign, are dismissed or your fixed term contract ends income tax and National Insurance will be payable on any shares purchased or awarded in the previous five years. Sufficient shares will be sold to cover this liability. You will also forfeit any Sharematch shares awarded in the last three years. Any remaining shares will be transferred into the Diageo Sharestore.

If you leave for reasons of redundancy, retirement or because your employing business is sold out of the group there will be no income tax or National Insurance payable nor will you forfeit any shares.

For more information see our leavers guides.

See the SIP Information Table for information on the treatment of Tax and National Insurance on SIP shares.

Want to know more? - See our Questions & Answers.

PLEASE NOTE: The following additional information is being provided in order for the offer of Freeshares and Partnership (Sharepurchase) shares under the Diageo Share Incentive Plan to fall within Article 4.1(e) of the Prospectus Directive (2003/71/EC), which is the employee share schemes exemption from producing a prospectus. The reasons for the offer of Freeshares and Partnership shares under the Plan are set out on this website. 7000 Diageo plc employees are being invited to join the Plan. The maximum number of shares that an employee will receive free of charge will depend upon Diageo's performance and will be based on a percentage of an employee's salary up to a maximum of £3,000 of shares. Employees can purchase a maximum of £1,800 of Diageo ordinary shares each year under the Plan. The maximum number of shares that an employee purchases will depend upon the amount (up to the £1,800 maximum) that the employee chooses to invest and the share price of a Diageo plc share at the time that the shares are purchased. The minimum number of shares that may be acquired would be nil if no employees choose to join the Plan. Participants will acquire existing shares under the Plan. Participants in the Plan will be entitled to dividends on the shares and can instruct the trustees under the Plan to vote in respect of their shares. Precise details of the rights attaching to the shares, which are ordinary shares, are set out in the Diageo plc Articles of Association. If you would like a copy of the Articles of Association, please contact the Company Secretary's Department who will provide you with a copy. Similarly, if you do not have a copy of the rules of the Plan and would like one, please contact the Company Secretary's Department.

Beware of your benefits

If you choose to join Sharepurchase, the amount of National Insurance you pay on your salary will drop slightly. A small number of employees may lose some entitlement to state benefits and / or tax credits because of this. You can find out if you will be affected at www.hmrc.gov.uk or you can ask for assistance at your local tax office.

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