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U.K. Individual Investors in the Company

Part 8 of the Taxation (International and Other Provisions) Act 2010 (and relevant regulations) contains provision for U.K. taxation of investors in “offshore funds”.

For U.K. tax purposes, where a non-U.K. entity meets the definition of an “offshore fund”, the treatment of the gain on disposal of an interest in the fund by its U.K. investors is dependent on whether the fund is a reporting fund or a non-reporting fund. If the non-U.K. entity, meeting the definition of an “offshore fund”, is treated as a reporting fund, any gains realized would be treated as capital gains and taxed under the capital gains tax regime at a rate of up to 24%. However, if the non-U.K. entity, meeting the definition of an “offshore fund”, is not a reporting fund, any gains realized would be treated as offshore income gain and subject to the income tax regime at the current rate of up to 45%.

Canadian General Investments, Limited has been advised that it is unlikely to be considered as an “offshore fund” for the purposes of the U.K. tax rules. Provided that the Company is not an “offshore fund”, any gains realized by a U.K. shareholder on the disposition of the Company’s shares would be treated as capital gains and taxed under the capital gains tax regime at a rate of up to 24%, depending on the U.K. shareholder’s circumstances and subject to any available exemption or relief.

This is not intended to be tax advice. Individual U.K. investors should seek their own personal tax advice prior to making decisions to trade in CGI’s shares.