If you own shares in Rolls-Royce Holdings plc, you might have noticed something strange on your statement: a holding of “C Shares” (typically priced at 0.1p).
Most companies just pay dividends as cash directly into your bank. Rolls-Royce does it differently. They issue “C Shares” instead of cash dividends. This confuses thousands of investors every year.
What is a C Share? A “C Share” is a non-cumulative redeemable preference share.
- In English: It is a voucher for cash.
- The Value: Each C Share is usually worth 0.1 pence.
- Example: If you have 10,000 C Shares, you have £10 waiting to be claimed.
Why Do They Do This? It gives you flexibility. You can choose to:
- Redeem for Cash: Turn them into money immediately.
- Reinvest: Turn them into more Ordinary Rolls-Royce shares (CRIP).
- Keep Them: Hold onto them (though they don’t grow in value).
How to Claim Your Money If you have accumulated C Shares over many years and never redeemed them, you might have a lump sum waiting.
- The Registrar: Historically, this was managed by Computershare, but in September 2022, the register moved to Equiniti.
- Action: You must instruct Equiniti to “Redeem” your C Shares. You can set up a standing instruction so this happens automatically in the future, meaning you get cash just like a normal dividend.
The “Payment to Shareholders” Trap Because these aren’t technically “dividends” (they are capital redemptions), they may be taxed differently. Check your tax vouchers carefully or ask your accountant if you are liable for Capital Gains Tax rather than Income Tax on these payments.