Questions of Cash: What should I do with these Rolls-Royce shares?
Saturday 15 May 2004
Q. I have a personal equity plan containing Rolls-Royce ordinary shares.
Q. I have a personal equity plan containing Rolls-Royce ordinary shares. My PEP manager tells me that Rolls-Royce is undergoing a capitalisation issue of redeemable B shares in July, when 50 will be allocated for every one ordinary share held at March last year. I can redeem these redeemable B shares immediately at 0.1p per share, with the £80 proceeds credited to my PEP; convert them to ordinary shares "at a price based on the market value on a date determined by the directors of Rolls-Royce"; or do nothing until future redemption/conversion opportunities arise, which are expected in July and January each year. What should I do?
A. Make your judgement based on what you expect to happen to the company's share price because redemption at future times will be based on the prevailing market price of ordinary shares. Liam Hopkins of the independent financial adviser Hargreaves Lansdown says: "Rolls-Royce has issued B shares as a novel way of paying a dividend. It is more for the benefit of the company than the shareholder. It is more tax-efficient for RR to pay a capital distribution in shares than cash. The shareholder has similar options, just as if they had received a cash dividend: they can immediately redeem the shares for cash (which is liable for capital gains tax); they can convert the B shares into RR ordinary shares (as if it were a scrip dividend); or they can keep the shares and have similar opportunities when B shares are next issued.
"They will receive 50 B shares per share, valued at 0.1p, that is a 5p dividend. If they choose to convert them into ordinary shares, they can do so at whatever the price is on the conversion date, which has been set at 212p, so you will need 2,120 B shares for each new RR share." Ben Melling, a tax partner at the accountant Grant Thornton, adds that an increasing number of listed companies are issuing redeemable shares. In this instance there is no tax consequence: the PEP is CGT-free and even if you held them outside a tax-free structure the amount of gain would be below the CGT threshold of £8,200.
Q. My husband and I have had a joint account with Lloyds TSB for 16 years. I use my maiden name professionally and our joint account uses that name. Our Lloyds TSB mortgage uses my married name and recently the bank gave us a reference using my married name. But my local branch refused to credit our joint account with a cheque for £6,000 issued to us in our married names, returning the cheque by post.
Because of a bank holiday this lost us a week's interest, before the bank credited the account on the basis that my husband's name was on the cheque. In a letter, the Bromley branch said that the Banking Act requires people using both maiden and married names to operate two bank accounts. This seems bizarre, but I suppose it must be true. MF, Norfolk.
A. No it is not. First, banks' duties are now governed by the Financial Services and Markets Act, not the Banking Act. Second, banks are not prevented from allowing a married woman to use her married and maiden name through the same bank account providing there is proof, usually the marriage certificate, that the names relate to the same person and that other requirements of proof of identity and address are met. Many banks do this although some may choose for operational reasons not to allow customers to use two names. Lloyds TSB says its branches should accept cheques into a single account using a customer's married and maiden names, subject to the relevant checks. The bank said it will remind its staff of procedures. Lloyds TSB apologises for the error and is sending £25 in compensation for your loss of interest and inconvenience.
I had my will drawn up 18 months ago by a local firm of solicitors. I am a single woman and wanted to leave money in trust to my nieces. I was told that I couldn't because I am single. Is this true? AC, Lewes
Get yourself new solicitors. No, it is not true. The specialist trust lawyer Stephen Pallister, of Charles Russell solicitors, says: "We have freedom to dispose of our assets on death how we like in England." The exception is where existing dependents are not properly provided for, when they can bring claims for family provision.
Customers paying up to £250 more on energy bills than they should every year
Scottish Power hit with sales ban by regulator
There are 'dark corners' of the investment and pensions industry, says Pension Minister
Midweek Money: The end (of the tax year) is nigh: act now
How to start your own internet business
- 1 What happens to your body when you give up sugar?
- 2 Drugs Live cannabis trial: Hash is less harmful than any other drug, expert claims
- 3 Turkish Airlines flight TK 726 crash-lands on Nepal runway in dense fog
- 4 Have sex with your iPad thanks to the new sex toy no-one asked for
- 5 The majority of sex workers enjoy their job - why should we find that surprising?
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
Durham Free School: 'Creationism taught at' free school facing closure
Ukip would cut billions from Scottish budget to fund English tax cuts
End of the licence fee: BBC to back radical overhaul of how it is funded
Ukraine crisis: Top Chinese diplomat backs Putin and says West should 'abandon zero-sum mentality'
Boris Nemtsov shot dead: Outspoken Putin critic who had expressed fears for his life is killed near the Kremlin
iJobs Money & Business
£8 per hour: Recruitment Genius: This Pension Specialist was established early...
£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...
Day In a Page
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads