CAUTION
This page is under review some information may be outdated

Tap Stock. Gilt edged security, not issued through the stock exchange, issued at a predetermined price.

Taper(ing) Relief.

1. An IHT relief in connection with PETs. A PET drops out of consideration after 7 years, but death of the donor within that period gives rise to a tax liability. Tapering relief operates to reduce that liability over the 7 year period so that death in the first 3 years attracts no relief, year 4 attracts 20% relief; years 5, 6 and 7, 40%, 60% and 80% respectively. The gift 'drops out' in year 8.

2. A CGT relief which for individuals has replaced indexation relief for the portion of an asset gain since 6th April 1998. The taper applies over a 10 year period and is different for business and non business assets.

Tax Allowance. An allowance creates reduction in taxable income, unlike a tax relief, which arises when an expense is incurred.

Tax Avoidance. Making full use of reliefs and exemptions to ensure as little tax as possible is paid.

Tax Break Investment. Used to describe an investment which offers a method of tax avoidance – legally reducing the amount of tax normally paid.

Tax Code. A code that tells your employer how much tax to deduct from your salary.

Tax Evasion. A criminal offence, generally involving fraud in escaping tax liability.

Tax Exempt Special Savings Accounts (TESSA). Effectively tax free deposit account, available to those over age 18. No new accounts could be opened after 6th April 1999 but contributions could be added to existing accounts, subject to constraints on timing and amount of deposits. Maximum deposit was £9,000 in total over 5 years, with maximum contribution limits applying to each year. Proceeds from TESSAs maturing after 6th April 1999 can be invested in cash ISAs in addition to normal ISA limits.

Tax Free Cash. Both occupational and personal pensions permit a certain account of cash to be taken in lieu of pension from the pension fund at retirement. This does not apply to FSAVCs, and Rebate Only pension arrangements

Tax Haven. A country which legally enables individuals and companies from other countries to avoid or pay lower rates of tax by allowing them to live or base their operations there.

Tax Relief. The system of exemptions and deductions on income and expenditure whereby the Tax Inspector can identify taxable income.
See ‘Tax Allowance’.

Tax Schedules. The different categories under which different sources of income and capital accrual are taxed.

Tax Voucher. Statement that an amount of money has been paid in tax, for example, when tax is deducted from a share dividend. No-taxpayers use the tax voucher to reclaim the tax.

Tax Year. The 12 month period from 6th April to 5th April the following year.

Taxable Income. Total income minus any tax free allowances.

Temporary Cover. Stop gap insurance cover whilst permanent cover is organised.
See ‘Term Assurance’.

Tenancy. Agreement to occupy a property, and can refer to both the agreement and the period of occupation.

Tenant. A person or business who is granted a lease or tenancy.

Tenants in Common. Individual shares in a property, not automatically on a 50/50 basis. On death, the individual shares may pass under a will separately, not automatically to the other party.
See ‘Joint Tenancy’.

Tender. A proposal to carry out a particular job or project.

Term Assurance. A life assurance policy without investment content which lasts for a specified period, provides a guaranteed sum assured in the event of death within that period, and terminates at the agreed date.

Terminal Bonus. Additional bonus which may be paid at maturity of an endowment policy or possibly on prior death of the policyholder.

Terms of Business Letter. Document which must be given to client by financial advisers prior to the transaction of business. Normally signed by client and adviser. Contents vary depending on nature of services being offered. Must include details of advisers status, polarisation, method of remuneration, adviser's obligations and complaints procedure.

TESSA only ISA. Special type of ISA used when existing TESSA matures. The capital from the matured TESSA, but not interest, can be invested, in additional to normal ISA limits.

Testate. Someone who dies testate is one who has died leaving a valid will.

Testator. Person who makes a will.

Third Market. A market in the shares of smaller, unlisted companies, who do not want to go to the expense of a listing on the stock exchange, nor wanted the regulations of the AIM. Effectively replaces the 'over the counter' market.

Tied Agent. A business which deals with the policies of one insurance company only.

Title. Right of ownership over property.

Title Deeds. Documents showing evidence of ownership over land.

Top Hat Scheme (or Top Up Scheme). Outdated term for an Executive Pension Plan.

Top Slicing. A method of calculating income tax liability on a chargeable gain from certain packaged products.

Topping Up Loans. A loan taken in addition to an existing loan.

Tort. A wrongful act or omission, other than a breach of contract, for which civil damages may be claimed.

Tracker Fund. An investment fund which invests mainly in shares which make up a particular Index with a view to duplicating its performance.

Traded Option. The right to buy or sell certain shares at a fixed price over the life of the option. The writer of the option receives the premium paid in return for the liability of being called upon to buy or sell shares at the fixed price. If the option is not exercised, it expires worthless.

Trading Period. Generally a period of 12 months over which the accounts of a business are prepared.
See ‘Accounting Period’.

Trail Fees. Renewal fees under unit trusts.

Training File. For IFA’s, a compliance requirement, in which should be kept a record of all training and competence work.

Tranche. An instalment, one of a series.

Transfer. In IHT terms, taken to mean any item of value where the ownership exchanges hands without cost. A gift.

Transfer Club. A local authority and central government facility which enables job changers to move from job to job between participating employers without the loss of fund value which may occur in the commercial transfer market.

Transfer Premium. A payment made from a contracted out defined benefit scheme to the state scheme, to buy the member back into SERPS. Is used when a member transfers from a contracted out to a contracted in scheme, which cannot accept GMP liability. The only transfer premium allowed after 6th April 1997 is the Contributions Equivalent Premium (CEP).

Transfer Value. Generally taken to mean the cash value of accrued pension benefit in an occupational pension scheme.

Treasury Bills. A short term bill of exchange, depending on discount to give it value, as it does not pay interest.

Treasury Stock. Loans to the government for an initial period exceeding 90 days. See Gilts.

Trial Balance. A list of debits and credits from which the profit and loss account is prepared

Trivial Pensions. A pension from an occupational pension scheme which is deemed to be too small to warrant being paid periodically and, therefore, can be paid in lump sum form, subject to preservation and contracting out requirement.

Trust. A verbal or written arrangement whereby one person or persons (trustees) agree to take care of assets and to use those assets in particular ways for particular people (beneficiaries).

Trustee. Individual or corporate body who looks after the assets of a trust and manages the trust in accordance with terms and conditions agreed verbally or in writing.

Turnover. Effectively, the sales record during the trading year.