Most preference shares are expressed to be redeemable. This means that the shares are to be redeemed or are liable to be redeemed at the option of the company that issued them, or the shareholder holding such shares (or both).
The main benefits of redeemable preference shares are providing certainty as to the terms of redemption and not having to get consent of the other shareholders (as per a share buyback) or pass a Special Resolution (as per a reduction of share capital).
The terms of the redeemable preference shares must be set out at the time of issue and are usually, but not always, set out in the Articles of Association of a company. This will include, for example, the date of redemption of the shares, whether redemption is to be made in one or more tranches and the redemption price.
The issue of preference shares is regulated by company law (in particular the Companies Act 2006), the Articles of Association of a company and any shareholders agreement entered into by its shareholders.