Unlike other listed companies, the Company makes payments to its shareholders in the form of C Shares.
C Shares are redeemable preference shares of 0.1p each in the capital of Rolls-Royce Holdings plc (the Company). The Company will generally issue C Shares to its ordinary shareholders twice a year in lieu of a cash dividend.
Shareholders can opt for one of the following:
When you first purchase shares in the Company you will receive a Welcome letter in which you will be invited to complete a Payment Instruction Form. If you would like to receive cash or additional Ordinary Shares from the Company it is important that you complete this form and return it to the Registrar. If you do not complete a Payment Instruction Form you will receive C Shares.
The Payment Instruction Form is a standing instruction which means it will be applied to all future issues of C Shares and no further action is required. All shareholders are free to change this instruction at any time by completing a new Payment Instruction Form.
The following information applies only to the C Shares issued by the Company in July 2011. All subsequent issues of C Shares should be treated, for tax purposes, as per the guidance provided in the Scheme Circular and the Shareholder Guide .
At the technical level the tax treatment of the C shares issued in July 2011 differs slightly from the analysis of other C share issues (as summarised above). However, for shareholders who elect either immediately to redeem their July 2011 C shares for cash or to reinvest their redemption proceeds through the CRIP, in practice the same result is expected to apply as for other C share issues.
For other shareholders the result may be different, depending on their personal circumstances. In broad terms, the tax liability, if any, which arises in respect of the July 2011 C share is likely to arise on issue rather than on a later redemption. Further details of the treatment of the July 2011 C share issue can be found on pages 30-31 of the Scheme Circular .