Santander UK plc Sterling Preference shares

What are the dividends on the Santander UK plc Sterling Preference Shares?
There are two series of Santander UK plc Sterling preference shares in issue: 10.375% and 8.625%. The cash dividend is paid net of the "associated tax credit" which is available to individuals who are UK tax residents. Under current law the cash dividend is: 9.3375% and 7.7625%.

What is the maturity date?
Each series of preference shares is perpetual. Santander UK plc does not have any rights to redeem the preference shares, but it does have the authority by way of shareholders' resolution to repurchase them provided that the Financial Services Authority agrees to this at the time of repurchase.

What is the Associated Tax Credit?
Each series of preference shares is issued on terms such that the sum of the cash dividend paid by Santander UK plc and the "associated tax credit" equals 10.375% or 8.625% as appropriate.

The "associated tax credit" for this purpose means United Kingdom taxation:

(a) which is, or is treated as having been, borne by a recipient of dividends on the preference shares by deduction at source or otherwise; or

(b) for which a credit (which term shall include an absence of or relief from liability and, if appropriate, a repayment of United Kingdom tax) in respect of United Kingdom taxation is available to the recipient of such dividends.

In each case on the assumption that such recipient is an individual resident in the United Kingdom for United Kingdom taxation purposes.

As defined, under current law the "associated tax credit" is equal to 1/9th of the dividend. With the exception of shares held through personal equity plans ("PEPs") or individual savings accounts ("ISAs"), shareholders who are not liable to tax on the dividend are not be entitled to claim payment of the tax credit in cash from HM Revenue and Customs.

The advantage to investors of the structure contained in the preference shares is that in the event of the reduction or withdrawal of the associated tax credit, the cash dividend paid by Santander UK plc would increase.

Why is the gross rate quoted when other preference shares quote the net rate?
If the associated tax credit were withdrawn, we would gross up the dividend. For this reason, we quote the gross rate on the shares.

What should I do if I lose my preference share certificate?
If you lose your preference share certificate, please phone or write to Santander UK plc Shareholder Services, who will then issue an indemnity for which there will be a fee.

Are the Santander UK plc preference shares paid net or gross?
(Both Preference 1 and 3) The interest rate is calculated gross however the payment is made net of tax. Interest is paid twice a year.

How do I sell preference shares?
Preference shares can be sold through any stockbroker.

Are preference shares redeemable or irredeemable?
They are Irredeemable.

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