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Jargon Buster

CGT

Capital gains tax: a tax on the growth in value of assets on a disposal.

Chargeable transfer

A gift that is immediately chargeable to inheritance tax. Since FA 2006, all transfers to trusts (except certain specified trusts) are chargeable transfers.

Charging clause

A clause in the trust deed or will dealing with trustee expenses, remuneration and whether trustees may keep commissions.

Codicil

A document amending a will/testament.

Connected parties

Usually spouses or civil partners, close family and business partners but the test varies depending on which tax is involved.

Consultation

There is now an obligation on employers to consult with members where prescribed changes are being proposed. This includes key changes such as increasing normal retirement date, stopping accrual and increasing member contributions. Similar provisions apply where there is a change to personal pension plans where the employer contributes.

Cash Balance Arrangement

A type of money purchase arrangement. The member is provided with money purchase benefits but the amount available is not, as would normally be the case, just that in the member's "pot" under the scheme.

Contract In/Contract Out

A way of a scheme or arrangement providing benefits in place of the State Second Pension (and before that SERPS). Clues will be references to GMP's, Protected Rights, Section 9(2B) Rights, Section 9(3) Rights and Reference Scheme Test. A simple enough concept made absurdly complex as only Government could.

Cash Equivalent

Also called the Cash Equivalent Transfer Value or CETV. Members are usually entitled to require a transfer of the cash equivalent of their benefit under one scheme to another. The CETV is the legal basis for calculating the transfer value.

CARE

Career Average Revalued Earnings

CETV

Cash Equivalent Transfer Value

CSPSSA

Child Support, Pensions and Social Security Act 2000

CIMP

Contracted in Money Purchase Scheme

COMB

Contracted out Mixed Benefit Scheme

COMP

Contracted out Money Purchase Scheme

COSR

Contracted out Salary Related Scheme

CEP

Contributions Equivalent Premium

Commutation

Converting some of the regular pension that would be payable from a scheme into a lump sum payment. Members usually take commutation up to the maximum tax free cash amount currently permitted by HMRC.

Contributions Schedule

Part of the new funding regime, the schedule for defined benefit schemes setting out the rates of contribution and payment dates. Generally, this is set by agreement between the trustees and the principal employer and is then signed off by the scheme actuary.

Clearance

The process by which parties who may otherwise be subject to certain of the Pensions Regulator's powers may obtain clearance for an activity, typically corporate activity. The Regulator has issued guidance on obtaining clearance.

Articles

Failed gifts and trusts

A refresher on the rule in Lassence v Tierney [1849].

Read more