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
What constitutes benefit?
In the case of Chapman vs Chapman [1954] the court found that it had no inherent jurisdiction to approve a variation of trusts for minor, unborn or unascertained beneficiaries just on the ground that the variation was for their benefit. The position was changed by the Variation of Trusts Act 1958 (the 1958 Act).
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