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Jargon Buster

Taper relief

A mechanism for reducing a tax charge. A CGT taper relief applied until the flat rate of 18% was introduced in FA 2008. A taper relief still applies for IHT to reduce the amount of tax payable on a PET provided the donor survived the gift by at least 3 years.

Tax year

The fiscal year, in the UK this is 6 April to the following 5 April.

Tenancy in common

Joint ownership where the right of survivorship does not apply.

Transfer of value

The basis for the charge to IHT, being the reduction in value of the estate after a gift or sale at an undervalue.

Trust company

A company set up to act as trustee. A trust company is not necessarily a trust corporation.

Trust corporation

A company set up to act as trustee that also complies with the rules in Trustee Act 1925. A trust corporation is allowed to hold real estate in a trust as sole trustee, otherwise at least two trustees are required.

Trustees

The individual(s) or company that hold the assets of the trust. The trustees have no beneficial entitlement to the trust assets, unless they are also beneficiaries. There is nothing under English law to prevent a beneficiary also being a trustee but conflicts of interest may clearly arise.

TSI

A transitional serial interest: introduced in FA 2006 for pre-existing trusts. A TSI can created in the transitional period or at any time in favour of the spouse of the beneficiary who had the life interest on 17 March 2006.

TKU

Shorthand for Trustee Knowledge and Understanding - requiring trustees of schemes to have or acquire the necessary knowledge and understanding to properly exercise their functions.

tPR

The Pensions Regulator

TV

Transfer value

TA

Trustee Act 1925 & 2000

TKU

Trustee knowledge & understanding

Trivial Pension

where pensions are small enough, HMRC rules will (if the scheme's own rules allow it) permit benefits to be commuted for cash.

Articles

Proposed Changes to Pensions Legislation

The draft Finance Bill was issued on 9 December 2010. Royal Assent is not expected until July 2011, so it is possible the laws summarised below may change before they are enacted. Comments on the draft legislation are invited before 9 February 2011.

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