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What are income shares?

Income shares are entitled (with some exceptions) to all the income from the trust's assets until the winding-up date. If stepped preference shares (see below) have also been issued by the trust, the income shares receive the excess after payments to the stepped preference shareholders have been made.

Holders of income shares are generally entitled to a final payment equal to the price at which the shares were first issued. So if the income shares were issued at £1 per share, the final payment would be £1 per share. However, this will be dependent on sufficient monies being generated when winding up the trust. If insufficient monies are available, income shares will only be paid out a proportion of their issue value. Occasionally (and if there are sufficient proceeds) income shares may be entitled to a portion of any capital growth made by the trust. Income shares rank after preference shares (if issued) at wind up, but before capital shares.

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