Jargon Buster
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.
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.
Articles
AON Pension Trustees Ltd v MCP Pension Trustees Limited [2010] EWCA Civ 377
This case is important on two levels. From a practical perspective, it is a stark reminder to all trustees of the importance of keeping accurate and up-to-date records of their beneficiaries. Equally the case shows how vital it can be to take out insurance on the winding-up of a trust.
From a technical perspective, the case is important because it confirms, for the first time, that the protection afforded by section 27 of the Trustee Act 1925 can be extended to trustees of pension schemes. However, trustees cannot rely on the s27 protection when they have already had ‘notice’ of a claim. The judgment examines what constitutes notice for these purposes.