Usually a large, one-off dividend, outside the normal pattern of a company's dividend payments. Special dividends are commonly used to return surplus cash to shareholders.

A special dividend paid by a public limited company whose shares are admitted to trading on the London Stock Exchange is often accompanied by a consolidation of the ordinary share capital to ensure that, as far as possible, the market price of a company's ordinary share before the special dividend is approximately equal to the market price of each ordinary share after the dividend (see Practice note, Consolidation and sub-division of share capital).

For more information on dividends, including special dividends, see Practice note, Dividends.