Following the separation of Home Retail Group and Experian from GUS, the previous base cost of any GUS plc shares held at 4.30pm on 6 October 2006 is apportioned for UK Capital Gains Tax (CGT) purposes in the following ratio: 58.235% to Experian Group Ltd shares and 41.765% to Home Retail Group plc shares (based on the closing prices of the respective shares on their first day of trading after their admission to the Official List of the LSE on 11 October 2006). For GUS shares acquired prior to the demerger of Burberry on 13 December 2005 which are affected by both the Burberry demerger and the subsequent separation of Home Retail Group and Experian, the original CGT base cost is apportioned 50.604% to Experian Group Ltd shares, 36.293% to Home Retail Group plc shares and 13.103% to Burberry Group plc shares.
For US federal income tax purposes, in order to determine their respective US tax bases in the Home Retail Group and Experian Group shares received pursuant to the demerger, US shareholders must allocate their basis in the GUS plc shares previously held by them between their Experian Group shares and Home Retail Group shares in proportion to their respective fair market values. For purposes of determining the allocation of basis between the shares in Experian Group and Home Retail Group for UK tax purposes, the market value of each company was determined based on trading prices as at 11 October 2006. Although not necessarily determinative for US tax purposes, we believe it would be reasonable in this case for US shareholders to use such UK tax valuations of the shares in allocating basis between their Experian Group shares and Home Retail Group shares. However, there can be no assurance that the IRS will agree with those valuations, or won't propose an alternative valuation.
US IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any US tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the US Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.
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