A-E
AB
Arising basis. Under the arising basis, a UK resident must pay UK tax on all income and profits, no matter where they come from. Until April 2025, it was an alternative to the remittance basis for non-domiciled residents.
abatement
The process whereby a testamentary gift is used (partially or completely) to settle liabilities or expenses.
accounts
Financial statements showing assets/liabilities, income/expenditure of an entity. From original accounting records a company (or trustees) may prepare:
(a) a profit and loss account (also known as an income statement), giving details of net profit/loss for a financial year up to the accounting reference date, and
(b) a balance sheet, giving details of the capital position, that is, capital assets less liabilities.
ACRA
Accounting and Corporate Regulatory Authority. The financial regulatory body of Singapore, formed by the merger of the Registry of Companies and Businesses and the Public Accountants’ Board.
ad valorem
‘According to value’. See stamp duty.
ademption/adeem
Ademption occurs when the subject matter of a testamentary gift no longer exists at the date of death, or has substantially changed in nature.
advancement
Distribution of capital to a beneficiary for their benefit under statutory or express powers given to trustees by the trust instrument.
AEA
Annual exempt amount. The amount of capital gains an individual can have in a year before needing to pay capital gains tax.
AEOI
Automatic Exchange of Information. An umbrella term for the system of international co-operation which involves states exchanging information about taxpayers.
affidavit
A written statement to the court. In the context of Wills they are often used to provide supporting evidence for, say, a lack of an attestation clause or to explain some other anomaly with the Will.
agent
Person (e.g. a broker) authorised to do an act for another, i.e., the principal.
AGM
Annual General Meeting. A yearly meeting for shareholders of a company and the board of directors. This may be a legal requirement.
AIF
Alternative investment fund. A type of collective investment undertaking.
AIFM
Alternative investment fund manager. A legal entity which manages an AIF.
AIFMD
Alternative Investment Fund Managers Directive. Directive 2011/61 of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41 and 2009/65/EC and Regulations 1060/2009 and 1095/2010.
AIM
Alternative investment market. The name for the marketplace on which AIFs are traded, a submarket of the London Stock Exchange.
allotment (of shares)
Method of distributing new shares, etc. in a company. An investor may decide to subscribe for or purchase shares or other securities of a company in consideration for the company’s allotting shares, etc. to him.
ambulatory
A document that is capable of revocation and amendment at any time until death. Wills are generally ambulatory in nature.
AML
Anti money laundering. A blanket term for the international laws and regulations designed to prevent financial crimes, in particular the process of making illegally obtained money appear legitimate.
animus revocandi
This Latin phrase refers to the intention to revoke a Will (contrasted with accidental destruction).
animus testandi
This Latin phrase refers to testamentary intention, that is the intention to make a Will.
annual return
Document filed with Registrar of Companies (or equivalent) each year, usually within 14 days of the AGM.
anti-avoidance
Provisions in onshore tax legislation to prevent the avoidance or reduction of tax liability. articles of association Also known as bye-laws, the articles govern the way in which a company is managed.
ART
Additional rate taxpayer. A taxpayer whose income exceeds the additional rate threshold.
assets
A fund of money or property of any kind. Trust assets originally belonging to the settlor that have been transferred to trustees to hold on trust. Asset management is the management of assets on behalf of another.
assurance
Insurance in respect of an event that will definitely happen, e.g. life assurance to provide a lump sum when a person dies.
ATED
Annual Tax on Enveloped Dwellings. A tax owed by companies in the UK who own residential property of significant value.
attachment
Process enabling a judgment creditor to obtain payment of the amount due to them by ‘attaching’ property belonging to the judgment debtor. The property is sold, and the creditor is paid from the proceeds.
attestation
The act of witnessing a document.
AUA
Assets under administration. Financial assets that a firm administers on behalf of clients, without actively managing investment decisions.
audit
The examination of original accounting records by an auditor to verify that the profit and loss account and the balance sheet are a true and fair reflection of the financial position of a company or other entity or trust.
AUM
Assets under management. Assets that a financial institution actively manages on behalf of its clients.
authorised capital
Nominal share capital of a company.
authorised investments
Investments suitable for trust funds.
BADR
Business Asset Disposal Relief. A capital gains tax relief on qualifying business and business asset sales.
bank
An institution traditionally engaged in taking deposits and offering loans to customers.
bank draft
Cashier’s cheque drawn by a bank.
bank secrecy
Implied term, in the contractual relationship between a bank and its customers, that the bank will keep the financial affairs of its customers confidential. There are situations when a bank must disclose information relating to its customer to authorities or third parties, for example under money laundering legislation or under an order of court.
bankruptcy
An individual who is unable to pay their debts and who is therefore insolvent may be made bankrupt by an order of the court that appoints a trustee in bankruptcy to collect in the assets of the bankrupt and distribute them pari passu among their creditors. Sometimes referred to as ‘Chapter 7’ in the US.
base rate
Rate of interest at which the Bank of England controls the lending rate in the UK. Equivalent to the prime rate in the US.
bearer shares/securities
Shares (or other securities) whose ownership may be transferred to another by delivery.
beneficial owner
Synonymous with equitable owner. The person who enjoys the property. May or may not also be the legal owner.
beneficiary
A person who does, or who might, benefit from a trust. Used for a person who owns a beneficial or equitable interest in trust property. Also used in respect of a person who is within the class of objects of a discretionary trust.
BIK
Benefit in kind. Tax on non-cash perks provided by an employer, such as company cars, which are considered part of an employee’s taxable income.
BIPs
Basis points. A unit used to measure percentage changes in interest rates, yields, or other percentages.
BMT
Bereaved minor’s trust. A special trust which provides inheritance tax relief for a minor who has lost a parent.
BOD
Board of directors. See director.
bond
Document issued by a government or company promising to repay borrowed money together with an agreed rate of interest at a specified time. When issued by a company usually called a debenture. Usually unsecured.
BRB
Basic rate band. The lowest and main rate of income tax in the UK.
capital
See assets. The capital value of assets must be distinguished from the income earned by those assets. Under company law, the capital of a company belongs to the company not to the shareholders, who own the shares (or share capital). Capital is subject to the capital maintenance rule so that it may not generally be distributed to shareholders until the company is wound up.
CBA
Cost-benefit analysis. A systematic approach used to identify, quantify, and compare the costs and benefits associated with a particular project or decision.
CBOE
Chicago Board Options Exchange. A stock exchange based in Chicago in the US.
CD
Certificate of deposit. A savings product with a fixed term, where money is locked in for a set period and may earn interest or be sold at a discount.
CDD
Customer/client due diligence. A collective term for a series of checks that look to ensure that a customer or client is not engaged in illegal activity.
certificate of deposit
A bond or certificate issued by a bank in exchange for a deposit of money for a fixed period.
certificate of incorporation
Document issued by the registrar of companies when a new company is registered under relevant companies legislation, evidencing the company’s birth and the fact that it is now a legal person.
CFPO
Collective Investment Funds (Certified Funds – Prospectuses) Order 2012.
CFT
Countering the financing of terrorism. The processes and procedures followed by organisations seeking to prevent their services being used for terrorist financing. Also known as counter terrorist financing (CTF).
CGI
Chartered Governance Institute. A professional body which provides qualifications and training for company secretaries and governance professionals.
CGT
Capital gains tax. The tax paid on profit made by the disposal of an asset that has increased in value.
charge
Also known as a mortgage, a charge is often given by a company or individual to a bank or other lender as security for a loan. In the event of default, the lender may exercise rights over the charged property, often including a power to sell it and use the proceeds to repay the loan.
chattels
Personal property as opposed to real property. Also known as moveables to distinguish chattels from land, which is immoveable. Includes cars, boats, furniture, consumer goods, etc.
cheque/checking account
An account with a bank upon which cheques (US: checks) can be drawn. Also known as a current account.
chief executive (CEO)
Managing director or chief executive director of the board.
child
An ambiguous word. It might mean a person under the age of 18 years, but may also simply refer to a relationship, e.g. ‘father and child.’ If the former is meant, ‘minor’ is a better word to use.
CIF
Collective investment fund. A pooled investment vehicle to which multiple investors contribute capital, which is then managed by a professional fund manager and allocated across a diversified portfolio of assets.
CIF Law
Collective Investment Funds (Jersey) Law 1988.
CIS
Collective investment scheme. See collective investment fund.
CIT
Corporate income tax. See corporation tax.
close company/closed company/closely held corporation
Company with only a limited number of shareholders. Broadly a small, privately owned company, with five or fewer participators (ie shareholders) or any number of participators who are all directors.
CMP
Compliance monitoring programme. A plan that outlines how a firm will ensure it is meeting its legal and regulatory obligations.
CO
Compliance officer. An employee whose role is to ensure that the firm meets its legal and regulatory obligations.
COBO
Control of Borrowing (Jersey) Order 1958.
common stock
See ordinary shares.
commorientes
The situation that arises where two or more persons die at a similar time and it is impossible to establish who died first.
conflict (of interest)
Arises when a person or firm acts (for example in a transaction) for two sides whose interests are not identical.
constitution
(i) Of a company – the Memorandum and Articles of Association.
(ii) Of a jurisdiction – the document that represents the supreme law of the state and that sets out the role and powers of the legislature and executive, etc.
(iii) Of a trust – refers to the transfer of the trust assets to the trustees.
constructive trust
An implied trust that arises in a variety of circumstances, e.g. an unauthorised profit by a trustee, or a receipt of property in breach of trust. A person who has dishonestly assisted in a breach of trust is also made liable as a constructive trustee.
contingent interest
An interest in property that will lead to possession of the trust property only if a specified event occurs, such as attaining 25 years, or marriage. corporation A company.
COP
Court of Protection. The division of the England & Wales High Court which deals with financial and welfare decisions for people who lack capacity.
corporation tax (corporate tax, CT)
A tax levied on the profits made by a corporation or company.
CP
Civil partner. An individual who has entered into a legally-recognised civil partnership , thereby acquiring rights and responsibilities equivalent to those of a spouse in a marriage.
CPA
Scotland – Continuing Power of Attorney. A document that authorises an appointed individual to manage the donor’s property and financial affairs, even after the donor loses mental capacity. It may be effective immediately or only upon the donor’s loss of capacity.
creditor
Person or entity who is owed money. A judgment creditor is a person/entity who has obtained a court order that another person (the judgment debtor) pay them money.
CRS
Common Reporting Standard. A global standard for AEOI developed by the OECD.
cy-près
The equitable doctrine that can prevent a charitable gift from failing due to lack of object.
damages
A sum of money claimed through the court as compensation for a legal injury.
death duties/taxes
Tax levied upon the value of a person’s estate on death.
debenture
A document that records the terms of a loan to a company and often, but not necessarily, includes terms whereby the company grants a mortgage (charge) over all or certain of its assets as security.
debt
Sum of money owed to another. Debt instrument includes a promissory note recording the terms of a short-term loan.
debtor
Individual or entity who owes money to another (the creditor).
declaration of trust
Trust instrument executed by the trustees. It may also mean the particular clause in any trust instrument, including a settlement, that declares that the trustees are to hold assets on trust.
deed
A legal document executed with certain formalities, including, traditionally, the signature and seal of the maker, although a seal is no longer required under English law. The virtue of a deed is that, contrary to the general rule, promises made in it are enforceable even though nothing is given in exchange for the promise.
deemed domicile
A type of domicile for IHT purposes and, from April 2017, also for income and CGT purposes. From April 2025, the rules around domicile for UK tax law have changed.
default
Failure to do something required by law.
defendant
An individual or entity who has been sued in a court of law by another, the plaintiff.
delivery
Transfer of possession of something from one person to another.
devastavit
The violation of a personal representative’s duties. Examples include paying liabilities in the incorrect order, failing to collect assets or making payments to the wrong persons.
director(s)
Individual(s) appointed to manage and control a company; collectively they form the board of directors of that company.
discretionary trust
A trust where the trustee has a discretion as to how to distribute the trust property among the class of beneficiaries.
dissolution of a company
Refers to the winding-up, liquidation and death of a company when it is removed from the Register of Companies.
dividend
Distribution of the profits of a company to its shareholders.
DOB
Date of birth.
DOD
Date of death.
Domicile
Broadly, the territory in which a person has their permanent home.
donatio mortis causa (DMC)
A deathbed gift, conditional on death.
double taxation
Occurs when the same income bears tax in more than one country. Double-taxation treaties are agreed between jurisdictions to alleviate the burden.
double taxation relief (DTR)
A relief to avoid double taxation where two or more countries tax the same property or event, sometimes called ‘treaty relief’.
Dow Jones (DJIA)
Dow Jones Industrial Average. A stock market index tracking the performance of 30 large and publicly traded US companies.
due diligence
Internal procedures and analysis (used to identify risk, liability and corrupt practices, etc).
duty
(i) Tax imposed on a written document, e.g. see stamp duty.
(ii) A legal obligation.
EEA
European Economic Area. An agreement which encompasses the EU and also Liechtenstein, Norway and Iceland, allowing them to be part of a single market.
EGM
Extraordinary General Meeting. A meeting of a company’s shareholders which is called on an ad hoc basis where urgent matters arise that cannot wait until the next AGM.
en ventre sa mere
Literally ‘in the mother’s womb’, so referring to an unborn child.
EPA
Enduring Power of Attorney. A legal document which appoints an attorney to manage the donor’s property and financial affairs, even if the donor later loses capacity. EPAs were replaced by lasting powers of attorney (LPAs) in 2007, but existing EPAs made before 2007 remain valid.
EPT
Excluded property trust. A trust-based tax planning arrangement which allows resident non domiciled UK residents to protect their non-UK based assets from UK inheritance tax. From April 2025, the rules around domicile and residency have changed.
equity
Body of law that complements the common law. An equitable right is enforceable in personam (qv).
ESG
Environment, social and governance. A set of principles that emphasises the importance of considering an organisation’s impact on the environment and society at large, including its employees. A core part of ESG is that it encourages organisations to look beyond mere profit as a marker of success.
essential validity
Although a Will may be formally valid, it is only essentially valid if the gifts contained within the Will are capable of legal effect in the jurisdiction of the asset concerned.
estate
An individual’s assets (less liabilities) at death.
ETF
Exchange traded funds. A fund which holds multiple investments, including stocks, bonds and commodities. Diversified like a mutual fund, but traded like a stock.
exchange control
Laws of a country that control the movement of its currency abroad.
execution
The formal method by which documents are signed and given legal effect.
executor
Person, named in a Will by the testator, whose function is to administrate the deceased’s estate and ensure the terms of the Will are carried out. See personal representative.
exemption clause (exclusion clause, exoneration clause)
Agreement between two or more parties whereby one party agrees to exclude or limit the potential liability of the other for certain acts or omissions to act.
excluded property
Property that is excluded from a charge to IHT.
F - J
FATCA
Foreign Account Tax Compliance Act. A 2010 US federal law, aimed at combating money laundering, which requires all non-US financial institutions to report on any customer with connections to the US.
FCA
Financial Conduct Authority. The UK regulator for financial services firms. The FCA was established in 2013 in the wake of the closure of the Financial Services Authority (FSA), the former UK financial services regulator, whose responsibilities were divided between the FCA and the Prudential Regulation Authority (PRA).
FDR
Formerly domiciled resident. A person who was born in the UK, with a UK domicile of origin, who has been resident in the UK both for the current tax year and at least one of the two immediately preceding tax years. From April 2025, the rules surrounding domicile and residence for tax purposes have changed.
FED
Federal Reserve System that provides central banking services in the US.
FFI
Foreign Financial Institution. Defined under FATCA as any non-US financial institution.
fiduciary (noun)
A trustee. The word is also used for a person who stands in a trustee-like relationship to another person. See fiduciary relationship below.
fiduciary duty
A duty owed by a fiduciary to act in the best interests of the person to whom the duty is owed.
fiduciary relationship
This exists where one person stands in a particular position of responsibility and good faith towards another person. Fiduciary relationships include trustee/beneficiary; director/company; lawyer/client; confidential employee/employer; business partners.
Financial Times Share Index
An index of share prices quoted on the London Stock Exchange.
financial year
Also known in the US as a fiscal year, it represents a company’s accounting period.
floating charge
A type of mortgage (or charge) over the assets of a company.
flotation
The process of ‘going public’, i.e. converting a private company into a public one by offering shares to the public at large. After flotation, the shares may be traded on a stock exchange.
FLR
Foreign loss relief. A relief which enables UK taxpayers to offset losses arising from foreign income or gains, particularly capital gains, against their UK tax liabilities, subject to specific conditions and limitations.
FNAV
Final net asset value. The final NAV at the end of a specific period. See NAV.
foreign exchange (FX or Forex)
International markets at which currencies of different countries can be bought and sold at the current exchange rate.
foreign income and gains regime (FIG)
The four-year regime under which qualifying new resident individuals (QNR) are effectively exemption from income tax and CGT on their foreign-sited income and gains.
formal validity
The requirements under s.9 of the Wills Act 1837 that make a Will, prima facie, valid (contrast with ‘essential validity’ ).
formation (of a company)
Incorporation.
formerly domiciled resident (FDR)
A UK resident who was born in the UK with a UK domicile of origin but who subsequently acquired a non-UK domicile, to whom special deemed domicile rules apply from April 2017. From April 2025 the rules around domicile in the UK have changed.
FOTRA
Free of tax to residents abroad. UK government securities which are beneficially owned by non-UK residents.
fraud
In most jurisdictions there is a crime of fraud, consisting of criminal deception. In other contexts, especially in equity, the word has a wider meaning and denotes dishonesty or bad faith.
fraudulent conveyance/transfer
Transfer of property from a debtor for the purposes of placing that property beyond the reach of creditors.
FRN
Floating rate note. A bond with an interest rate that fluctuates based on a linked benchmark, such as LIBOR.
FS Law
Financial Services (Jersey) Law 1998.
FTID
Financial Times Interactive Data. Provides financial and business information to support analysis by investors and service providers.
fund/investment manager
Officer of banking or investment institution who decides which investments a fund, etc. shall hold.
GAAP
General Accepted Accounting Practice. A blanket term for the regulation on how company accounts must be prepared in the UK.
GAV
Gross asset value. The aggregate value of all assets held by a company or investment fund, calculated before deducting any liabilities or obligations.
GBP
British pound sterling.
GDP
Gross domestic product. The total value of all goods and services produced by a country over a specified period.
GDPR
General Data Protection Regulation. Regulation 2016/679 of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46. Landmark data protection law passed by the EU in 2016 which came into force on 25 May 2018 that compels businesses that operate within the EU to protect customer data.
general meeting
Meeting of shareholders of a company.
GFSC
Guernsey Financial Services Commission. The financial regulatory body for Guernsey.
GGF
Guernsey Green Fund. A designation for schemes which allow investment into green initiatives.
GIFA
Guernsey Investment Fund Association. An association which represents Guernsey’s fund management industry.
GP
General partner. A member of a business partnership who bears unlimited personal liability for the debts and obligations of the business.
GPUT
Guernsey Property Unit Trust. A kind of trust based in Guernsey which is often used to acquire UK real estate.
group (of companies)
A company is the parent or holding company of another (the subsidiary) when it holds the majority of its shares. The two companies comprise a group.
GST
Goods and services tax. An indirect tax applied to the sale of goods and services in some jurisdictions.
guarantee company
A company is limited by guarantee when its Memorandum contains a guarantee by its shareholders to contribute a certain amount towards the debts of the company in the event of its being wound up as insolvent.
GWRB
Gift with reservation of benefit. A gift with reservation of benefit occurs when a person gives a gift as part of inheritance tax planning, but retains some benefit from it. For example, a parent might transfer ownership of their home to their child, while retaining occupation.
Hang Seng Index
Index of prices of shares quoted on the Hong Kong Stock Exchange.
HMRC
His/Her Majesty’s Revenue and Customs.
HMT
His/Her Majesty’s Treasury.
HNWI
High net worth individuals. A person who has liquid assets above a certain threshold, often $1 million. High-net-worth individuals are usually dealt with by distinct business units within large financial organisations.
holding company
See group.
holograph Will
A Will written entirely in the handwriting of the testator and signed by them. In England and Wales holograph Wills are valid if executed in accordance with s.9 of the Wills Act 1837.
hotchpot
The process whereby lifetime gifts (often to children) are accounted for in the distribution of an estate. The rules for hotchpot on intestacy were abolished in 1996.
HRT
Higher rate band. The tax rate band that falls between basic rate and additional rate.
IBC
International business company. An offshore company set up as a tax-neutral entity. Typically its activity is limited within its jurisdiction of incorporation and it may still be subject to foreign tax obligations under controlled foreign corporation (CFC) rules.
ICC
Incorporated cell company. A corporate structure in which a parent company can establish multiple, independently incorporated cells. Unlike in a protected cell company (PCC), each cell operates as a legally distinct entity.
ICSA
Institute of Chartered Secretaries and Administrators. See CGI (Chartered Governance Institute).
IDC
International Data Corporation. A market intelligence provider for information technology, telecommunications and consumer technology.
IFA
Independent financial adviser. A finance professional who can offer advice on a range of financial products from various providers.
IFRS
International Financial Reporting Standards. A set of standards for publicly traded companies with the aim of increasing transparency and comparability of company financial statements internationally.
IHT
Inheritance tax. A tax due on the estate of someone who has died.
IIP
Interest in Possession. When a property is held in trust, the beneficiary holds an interest in possession when they have an immediate right to the income or enjoyment of it.
IMA
Investment management agreement. A contract between investor and fund manager wherein they agree the specifics of how the fund will be managed.
implied term
A term in, for example, a contract or trust instrument, that has not been expressly agreed by the parties but is implied into the agreement or trust by law.
in personam
Against or in relation to a specific person only.
in rem
Made against, or affecting, a thing, and therefore other people generally.
income
Money received on a recurring basis, often in the form of a reward for business (profits, wages) or investment (dividends, interest, rents).
income statement
See accounts.
income tax (IT)
Direct tax on profits of an income nature.
incorporation
The formal initial registration of a company under companies legislation: its birth.
indemnity
Agreement whereby one party undertakes to compensate another in the event of loss or expense.
indirect taxation
Tax paid because of purchase of property or receipt of services, e.g. sales tax, hotel/tourist tax, insurance premium tax.
insolvency
A situation that arises when an individual or entity is unable to pay its debts.
insurance
A contract with an insurance company that if an uncertain event occurs (i.e. an event that might or might not happen), the company will pay compensation for any loss coming from the event. Typical examples are fire insurance and public liability insurance. Compare with assurance.
insurer
Person or company who insures another (the insured) in respect of certain agreed risks set out in the insurance policy.
intellectual property (IP)
Intangible property created by intellectual effort or inventiveness. Includes such things as copyright, patents, trademarks.
inter vivos
A transfer or gift taking place during one’s lifetime. Trusts are often created either on death by Will, or inter vivos.
Internal Revenue Service (IRS)
Branch of US federal government whose function is to collect taxes.
intestacy
Arises when an individual dies without a valid Will. Their estate will pass to their heirs as defined in the relevant intestacy laws.
investment analyst
Individual employed to give investment advice.
IPDI
Immediate post death interest. A type of interest in a trust which is set up in the testator’s Will and takes effect on their death. It is treated like part of the beneficiary’s estate for tax purposes even during the testator’s lifetime.
IPEV
International Private Equity and Venture Capital. A global independent body which provides guidelines for the valuation of private equity and venture capital investments.
IPO
Initial public offering. An IPO is the sale of shares by a private company for the first time on a public market. An IPO occurs so that a private firm can raise capital.
IPS
Investment policy statement. A document that provides an outline for financial advisors when managing their clients’ investments.
ISO
International Organization for Standardization. An independent body which aims to standardise business practices globally.
issue
A person’s lineal descendants – children, grandchildren etc.
ITTOIA
Income Tax (Trading and Other Income) Act 2005.
JFSC
Jersey Financial Services Commission. The financial regulatory body for Jersey.
JPF
Jersey private funds. An investment structure offered in Jersey which is aimed at professional and eligible investors. Its streamlined setup and adaptable framework make it a popular choice.
JPUT
Jersey Property Unit Trust. A kind of trust based in Jersey which is often used to acquire UK real estate.
judgment
Order or decision of a court of law. N.B. note the spelling.
judgment creditor
Person to whom a court of law has ordered another (the judgment debtor) to pay money.
K - O
knowledge and approval (K&A)
The concept that a testator knew and approved the contents of their Will. This is a separate consideration to mental capacity.
land
Includes both freehold land (realty) and leasehold land. Includes anything built on the land such as a house.
lapse
The failure of a testamentary gift as a result of the object of the gift being unable to take (often because they have predeceased the testator).
lease/leasehold
A legal interest in land, whereby the owner (the landlord) allows another (the tenant) exclusive possession of land for a fixed term (e.g. 99 years) or for what is known as a periodic term, e.g. from year to year, until terminated by a notice to quit.
legal owner
Person who owns the legal interest in an asset and is said to have rights in rem (qv) enforceable against the whole world. May hold the legal interest on behalf of another, i.e. the beneficial, equitable owner.
lex domicilii
The law of the particular jurisdiction of the domicile of a person. This is usually the law that applies to a person's moveable property.
lex situs
The law of the particular jurisdiction of the location of an asset. This is usually the law that applies to a person's immoveable property.
LIBOR
The London Inter-Bank Offered Rate was the average daily interest rate for short-term loans between major banks. The manipulation of the Libor rates by major banks caused a significant scandal in 2012 and investigation by multiple regulators. Libor was phased out from 2021 by the Bank of England. Its final listings were published on 30 September 2024.
LIFO
Last in, first out. A method of inventory management by which the last items bought are considered the first ones sold.
limitation period
The period within which a lawsuit must be commenced. A court will not entertain legal proceedings started after the expiry of the limitation period.
limited liability company
A company whereby each shareholder has limited their liability to pay any debts incurred by the company.
liquidation
See dissolution of a company.
listed company
A public company whose shares may be bought and sold on a stock exchange.
litigation
Legal proceedings in a court of law.
LLP
Limited Liability Partnership. A partnership structure in which each partner has limited their liability for the debts and obligations of the partnership.
loco parentis
Persons who are acting as parents and are regarded on an equal footing. This can be important for certain areas of private client practice, for example the rule against double portions.
long term UK resident (LTR)
The status of an individual which links them to the UK for IHT purposes.
LP
Limited partner. An investor in a limited partnership who is not personally liable for the partnership’s debts beyond their contribution.
LPA
Limited partnership agreement. A legal document that sets out the rules and terms of a limited partnership, including the roles, responsibilities, and rights of the limited partners.
mandate
Document giving details of the operation of a bank account, including specimen signatures of the persons authorised to draw from the account.
MAS
Monetary Authority of Singapore. Central bank and financial regulatory body of Singapore.
member
Shareholder (of a company).
memorandum of association
With the articles, comprise the constitution of a company.
mental capacity
Broadly, the ability of a testator to understand what it means to make a Will and what other factors they should consider. This concept considers the evidence of the testator’s sound mind, memory and understanding.
merchant bank
Type of bank, i.e. one dealing in or arranging commercial loans and finance. Known as an investment bank in the US.
MIFID II
Markets in Financial Instruments Directive II. Directive 2014/65 of 15 May 2014 on markets in financial instruments and amending Directive 2002/92 and Directive 2011/61. An important EU law that relates to financial investments and related services. Issued in 2014, MiFID seeks to standardise the EU’s legislative framework for investment-related financial instruments.
minor
A person under the legal age of majority, normally 18.
minority shareholder(s)
Person(s) who own 49% or fewer of the shares of a company and is (are) therefore less able to have an impact upon the way the company is run, as they can be outvoted by the majority shareholder(s).
misfeasance
Improper act. Applies to the act of a fiduciary, such as a trustee or officer of a company, who is guilty of misapplication of money or property of a trust/company, or breach of their fiduciary or other duties in relation thereto. A person guilty of misfeasance will be ordered by a court of law to repay the money for which they are accountable, restore the money/property misapplied, etc.
MLRO
Money laundering reporting officer. A role within banks and financial institutions which entails oversight of anti money laundering and counter financing of terrorism controls within that organisation.
mortgage
See charge.
MPT
Modern portfolio theory. A mathematical theory by Harry Markowitz in the 1950s, designed to optimise an investment portfolio by balancing risk and return.
MRR
main resident relief. A Capital Gains Tax exemption that applies to the disposal of an individual’s primary residence. Provided the qualifying conditions are met, any gain arising from the sale is excluded from taxable income.
mutual funds
Type of open-ended collective investment scheme in the US.
NASDAQ index
National Association of Securities Dealers Automated Quotation System. A stock market index that tracks the performance of over 3,000 companies listed on the NASDAQ Stock Exchange in the US.
NAV
Net asset value. A measure of a company’s total assets, less its liabilities.
ND
Non-domiciled. A UK resident whose permanent home is outside the UK. From April 2025, rules on ND status have changed.
NED
Non-executive director. A board member who does not engage in day-to-day management but plays a key role in providing independent oversight, strategic guidance, and expert advice. They can bring useful external perspectives as well as their own expertise.
negligence
Falling below the standard of prudence expected of a reasonable person. Breach of a duty of care.
net worth
Value of assets less liabilities.
next of kin (NOK)
In a legal context means the people who are entitled to the property of a deceased who has died intestate. See intestacy.
NGO
Non-governmental organisation. A non-profit group which is not affiliated with the state.
Nikkei Stock Average
Index of prices of shares quoted on the Tokyo Stock Exchange.
Nil rate band (NRB)
The amount of a person’s estate that is taxed at 0% for inheritance tax (currently £325,000). A further ‘residence nil rate band’ at 0% is available where homes are left to issue (currently £175,000).
NOMAD
Nominated advisor. An independent financial advisor who has been approved to act in the Alternative Investment Market (AIM).
nominee
An agent acting on behalf of another, the principal. A nominee shareholder is a person who holds shares as agent subject to a bare trust on behalf and in favour of the beneficial owner of the shares.
non-domiciliary
A person who is domiciled outside the UK. Non-domiciliary status was abolished in April 2025.
non-residential CGT (NRCGT)
CGT payable by non-residents on the disposal of UK residential property.
non-long term UK resident (NLTR)
An individual who is not a long-term UK resident for IHT purposes.
NPO
Non-profit organisation. A legally recognised organisation that aims not to make a profit for its members but to achieve a public good. Surplus income is reinvested to further its mission, rather than distributed as profit.
NRCGT
Non-resident capital gains tax. A tax that applies to non-residents who sell or otherwise dispose of UK property or land. From 2019, this includes indirect disposals (such as selling shares in a company that owns the property) and both residential and non-residential land.
NSI
non-savings income
numbered account
A bank account that is identified by number rather than the name of the account holder.
objects of a company
The purposes for which the company was incorporated.
objects of a trust
The beneficiaries. If the trust is for people, the people are the objects of the trust. If the trust is to achieve a purpose, the purpose is the object of the trust.
OCIF guide
Open-Ended Unclassified Collective Investment Funds Guide. A guide published by the Jersey Financial Services Commission and containing the conditions to which open-ended collective investment funds must adhere.
OECD
Organisation for Economic Co-operation and Development. An international body allowing member countries to collaborate on economic questions including financial regulation.
OEIC
Open ended investment companies. A collective investment fund with variable capital.
off balance sheet transactions
The practice of structuring a company’s activities so that certain assets do not appear on its balance sheet.
officer
The officers of a company include its directors, secretary and, in some cases, its accountant and lawyer.
offshore company
A company incorporated in a different jurisdiction from that where the investors/shareholders reside.
OIGs
Offshore income gains. Gains arising on a disposal of a holding in a particular type of offshore investment fund that attracts a charge to income tax instead of CGT.
ordinary shares
Also known as common stock. A holder of ordinary shares will generally be paid a dividend after payment to holders of preference shares (preferred stock).
OSCR
Office of the Scottish Charity Regulator. Scottish official body that oversees charities.
OTC
Over the counter. A form of trading that happens directly between two parties instead of through a formal stock exchange.
overseas workday relief (OWR)
Overseas Workday Relief. A tax relief aimed at foreign domiciled UK residents. It permits a portion of income earned through UK employment which is performed wholly or partially abroad to be classified as foreign income for tax purposes, potentially resulting in more favourable tax treatment.
P - T
PA
Personal allowance. The earnings threshold above which income tax is charged.
parent company
See group.
pari passu
Proportionally or ranking equally. In a bankruptcy, each creditor is paid pari passu, i.e. if the bankrupt’s total assets are only one-third of the value of the total debts, each creditor will be paid one-third of the amount due to them.
PAYE
Pay-as-you-earn. A system of income tax collection in which employers deduct tax from employees' wages or salaries before payment is made. These deductions are treated as advance payments toward the employee’s overall tax liability. If the total amount withheld exceeds the final tax due as calculated through a tax return, the excess may be refunded to the employee.
PCC
Protected cell company. A company structure which consists of multiple discrete ‘cells’ with legally separate assets and liabilities. This structure allows cells to be protected against the claims of other cells’ creditors.
PE
Private equity. Stock in a private company which is not available to the public.
PEP
Politically exposed person. An individual whose proximity to a public function, or to somebody charged with a public function, means that they represent a higher risk for bribery and corruption.
per capita/per stirpes
The manner in which distributions are shared. Per capita is ‘per head’ and per stirpes is ‘per branch’. A testator leaves the residue to their children (A and B), with a substitutional gift to any grandchildren. B has predeceased, leaving C and D (grandchildren). In a per capita distribution, A, C and D will take a third each. In a per stirpes distribution, A will take a half, and C and D will share a half.
perpetuities, the rule against
A rule limiting the duration of a trust.
personal representative
On the death of an individual, their estate vests in their personal representative to administer and transfer to the beneficiaries named in the deceased’s Will or who are otherwise entitled under the laws of intestacy. A personal representative may be either an executor (a person chosen by the deceased’s Will), or an administrator (a person chosen by the court if there is no executor.)
PIT
Personal income tax. A tax on earnings by individuals.
plaintiff
Person who commences a lawsuit against another, the defendant.
PNAV
Preliminary net asset value. Initial estimate of a fund’s per-share value, calculated before the final net asset value is confirmed and published.
POI law
Protection of Investors (Bailiwick of Guernsey) Law 2020.
portfolio
List of investments in shares and other securities. Portfolio management is another name for investment management.
power of attorney (POA)
A legal document, usually a deed, empowering one person to act for another and bind that other to contracts/transactions, etc.
powers
Authority to carry out an act. Power of appointment is a discretionary power to dispose of property generally or for the benefit of a specified class of persons, which the donee (the person given the power) may or may not exercise.
PPR
Principal private residence relief. A tax relief applied to the capital gains tax due when an individual disposes of their only or main residence.
PPS
Participating preference shares. Allow a profit-based distribution dividend to investors as well as the usual fixed dividend.
PR
Personal representative. The individual legally appointed to administer the estate of a deceased person. May be an executor or an administrator (where no valid Will exists).
preference share
Preferred stock. See ordinary share.
prime rate
The rate of interest that controls the lending rate in the US. Similar to the base rate in the UK.
private bank
A bank that transacts banking business on behalf of a limited number of customers.
private company
A company that is not a public company.
privileged Will
A Will made by military men and women that, in certain circumstances, does not have to meet the usual testamentary and formal requirements.
probate
Legal document issued by a court to authorise the executor or person named therein to administer the estate of the deceased.
profit and loss account
Income statement. See accounts.
promissory note
An IOU. A document containing a promise to repay the lender the principal sum set out therein (with interest) either on demand or on a future date.
promoter
The incorporators who take the necessary steps to incorporate a company.
property
Something that is owned; possessions. May be of any sort, e.g. land, personal property such as furniture, investments, intellectual property, equitable interests belonging to a beneficiary of a trust.
propound
To propound a Will is to propose a Will as valid and to take steps to obtain the grant of representation.
proxy
An agent appointed by a shareholder to vote on their behalf at a meeting of shareholders.
PTA
Personal tax account. A secure online service that enables individuals to manage their tax affairs digitally. Through this platform, users can view and update personal information, check tax liabilities, access PAYE and self-assessment details, and interact with HMRC regarding various tax-related matters.
PwC
PricewaterhouseCoopers. Accountants: one of the ‘Big 4’ firms along with Deloitte, KPMG, and EY.
qualifying foreign employment income (QFEI)
The foreign sited earnings and securities income of an QNR in respect of which a foreign employment election (FEE) and foreign earnings relief claim (FERC) may be made under the FIG regime.
qualifying foreign gains (QFG)
The foreign gains of a QNR in respect of which a foreign gains claim (FGC) may be made under the FIG regime.
qualifying foreign income (QFI)
The foreign sited non-employment income of a QNR in respect of which a foreign income claim (FIC) may be made under the FIG regime.
qualifying new resident (QNR)
Individuals who qualify for the FIG regime.
qualifying overseas capital (QOC)
Income and gains which is designated for treatment under the temporary repatriation facility (TRF).
quorum
A minimum number of persons who must attend a meeting to make the proceedings of the meeting valid.
RAT
Rate applicable to trusts. An income tax rate used in the UK to tax certain types of trust income.
RB
Remittance basis. A tax basis applying to non-domiciled UK residents, in which UK tax is paid on UK income and gains in the year they occur, but only applied to foreign income and gains when they are brought to the UK. Until April 2025, it was an alternative to the arising basis for non-domiciled residents.
RBC
Remittance basis charge. Tax due on nominated foreign income and gains. This may be income tax or capital gains tax, or both.
RBUs
Remittance basis users. Non-domiciled UK residents who, until April 2025, chose to be taxed under the remittance basis.
real property, real estate
Land and buildings on it.
rebuttable
Something that is capable of being challenged and overturned. For example, the presumption that alterations on a Will were made after execution is rebuttable – this presumption can be overturned if sufficient evidence is accepted.
redeemable shares
Type of share issued by a company which, by its terms, may be redeemed (i.e. bought back) by the company at a future date.
registered office
Official address of a company.
registers (of a company)
Records that a company is required to maintain. Often separate registers of shareholders (the share register), of directors and officers, and of mortgages of the company.
Registrar of Companies
Person empowered by companies legislation to exercise a supervisory function over the formation, etc. of companies in accordance with duties given to them by statute.
relevant property
Broadly, all property held in a lifetime trust created on or after 22 March 2006 and all assets in any other trust in which the beneficiary does not have an interest in possession (there are specific exceptions to this).
relevant property regime (RPR)
The system under which IHT is charged on relevant property held in trust.
relevant property trust
A trust holding relevant property that is subject to the RPR.
residue
Strictly, this is what remains after the payment of debts, testamentary expenses and legacies. It is the part of the estate that is available for distribution to the residuary beneficiaries. In general usage the definition is less clear and is often extended to mean ‘whatever is left’ and it is thus common to see phrases such as ‘The IHT is paid out of residue’ or ‘The legacies are paid from residue’ (neither of which are strictly correct).
resolution
Decision made by a committee at a meeting, e.g. directors, shareholders, trustees.
resulting trust
Occurs automatically when a trust fails wholly or partly and the trust property (or some of it) ‘results’ back to the settlor or, if the settlor is dead, to the settlor’s estate.
reversionary interest
An interest in the remainder of a trust (e.g. the interest passing to the remainderman after a life interest has come to an end).
revocation
The act by which a Will is rendered inoperative. This can happen expressly or by operation of law.
RICS
Royal Institution of Chartered Surveyors. An internationally recognised professional body that represents individuals working across the Built Environment, including sectors such as Construction, Land, Property, and Real Estate.
RND
Resident non-domiciliary/domiciliaries. A resident of the UK whose domicile (permanent home) for tax purposes is outside the UK. Non-domiciliary status was abolished in April 2025, replaced by a residence-based regime.
RNRB
Residence nil-rate band. An inheritance-tax-free allowance for people who are leaving their property to particular relatives, including spouses. It provides a tax-free threshold on the value of the property, supplementing the standard nil-rate band and potentially reducing the overall inheritance tax liability.
RPPS
Redeemable participating preference shares. A class of shares that entitles the holder to a fixed dividend and a share in additional profits distributed to ordinary shareholders. These shares are also redeemable, meaning the issuing company has the right to repurchase them at a future date, subject to agreed terms. See participating preference shares.
RPS
Redeemable participating shares. A class of shares that entitles the holder to participate in the profits of a company or investment fund and includes a redemption feature, allowing the issuer to repurchase the shares at a future date under specified conditions.
S&P
Standard & Poor’s. A financial information and analytics company with a well-known market and securities index, the S&P 500.
SDLT
Stamp duty land tax. A tax charged on purchasing residential or commercial property above a certain threshold in England and Northern Ireland. In Scotland, this is replaced by the land and buildings transaction tax (LBTT), and in Wales, by the land transaction tax (LTT).
secretary
Administrative officer of a company but without the powers of a director.
secured creditor
Person or entity to whom a third party (the debtor) owes money and who has the benefit of security for the debt.
Secured Overnight Financing Rate (SOFR)
See LIBOR.
settlement
A trust. Also a document creating a trust, particularly a document with two parties. Compare declaration of trust.
settlor
Person who creates a settlement or trust.
SFDR
Sustainable Finance Disclosures Regulation. Regulation 2019/2088 of 27 November 2019 on sustainability-related disclosures in the financial services sector.
shadow director
A person who is not a director of a company but on whose authority the directors of the company are accustomed to act.
share
The ownership of a company is divided into shares, owned by its shareholders. Shares carry certain rights but not ownership of any particular asset of the company.
situs
The location of property or source of income.
SOFA
Statement of Financial Activities. A financial report produced by charities which summarises income and expenses over a specific period (typically a year). It provides transparency and accountability and demonstrates to stakeholders how the charity has used its resources in pursuit of its charitable objectives.
solicitor
English lawyer.
source of funds/source of wealth
Two related but distinct concepts. Source of funds is concerned with the origin, or source, of an individual’s funds. Source of wealth is concerned with identifying the entire wealth of an individual. Source of wealth and source of funds checks are carried out to help identify and prevent financial crimes like money laundering, terrorist financing, fraud and corruption.
SOX
Sarbanes–Oxley Act. A United States law which mandates best practices for financial record-keeping and reporting.
SP
Scheme Particulars. A document which contains detailed information about a regulated collective investment scheme, including fees, rules, investment strategies and risk factors.
SPC
Segregated portfolio company. See protected cell company.
split-year treatment
Special tax treatment which an individual may apply for if they have been resident in the UK for only part of a tax year.
SPV
Special purpose vehicle. A legally distinct entity established to carry out a specific, limited function. SPVs are commonly employed in finance, investment, and real estate to hold assets or liabilities separately from the parent organisation.
SRB
Special rate band. A specific income tax rate band applying to certain types of income which are taxed differently from regular earnings – for example, dividend income or savings interest.
SRT
Statutory Residence Test. A test which an individual can perform to work out their UK residence status for a given tax year.
stamp duty
Tax imposed on legal documents that record particular transactions, either ad valorem (according to the value) or a fixed amount.
stock
Name for an ordinary share in the US.
stock exchange
Market for sale and purchase of shares, etc.
subscribers
The incorporators of a company (sometimes agents of the incorporators) who sign (or subscribe to) the memorandum of association.
subsidiary
See group.
T-Bills
Treasury bills. A short-term debt instrument issued by a government to raise funds, typically with maturities ranging from a few weeks to one year. T-Bills are sold at a discount to their face value and do not pay interest; instead, investors earn a return when the bill matures at full value. US T-Bills are traded on secondary markets, whereas UK T-Bills tend to be held to maturity.
TA
Transfer agency. A third party that manages administrative tasks related to the ownership of securities. Often a trust company or a bank.
tax shelter
Term used to describe investments or structures that allow a taxpayer to reduce their tax liability.
tax treaty
Agreement between states relating to the collection of tax.
telegraphic transfer
Wire transfer (of funds by a bank).
temporary repatriation facility (TPR)
The temporary lower charge to income tax on income and gains not remitted to the UK before 6 April 2025 in respect of which a designation election (DE) has been made.
testament
A Will.
testamentary capacity
The general capacity of the testator to make a Will. It includes the mental requirements (mental capacity) and age requirements (usually 18).
testamentary gift
A gift made by Will.
testator
The individual who has made a valid Will.
TIEA
Tax information exchange agreement. Bilateral agreements between states and territories providing for the exchange of information on request for specific tax investigations.
TIN
Tax identification number. An identifier assigned to a specific taxpayer in order to facilitate fulfilment of tax obligations.
TISE
The International Stock Exchange. A stock exchange based in Guernsey.
TOAA
Transfer of assets abroad. A tax regime aimed at preventing tax evasion by UK residents transferring assets abroad.
TOL
Trusts of land. Land held by a legal owner or owners on trust for beneficial owners.
TRS
Trust Registration Service. An online register for trusts used by HMRC.
trust company
A non-banking financial institution that provides trust services.
trust instrument
Generic name of the document that creates a trust. Covers both settlements and declarations of trust.
trust services
Provision by banks and trust companies of corporate trustees, and of management and administration of trusts.
trustee
Fiduciary owner of trust assets.
trustee in bankruptcy
If an individual is insolvent and unable to pay all their debts, they may be declared bankrupt. A trustee in bankruptcy is then appointed to administer the assets of the bankrupt, sell them and distribute the proceeds for the benefit of the creditors.
U - Z
UBO
ultimate beneficial owner
UCITS
Undertakings for Collective Investment in Transferable Securities
UK domiciliary
A person who has a UK domicile. From April 2025, the rules around UK domicile have changed.
ultra vires
‘Beyond their powers’. A largely defunct doctrine that limits the capacity of a company to transacting business only for those purposes (or objects) it was incorporated to fulfil.
undue influence
Undue influence means coercion to make a Will in particular terms. Where there are any suspicious circumstances, knowledge and approval cannot be presumed.
unilateral relief
Double tax relief on tax arising in multiple jurisdictions that is not relieved by a double taxation treaty.
Unit Trust
Collective investment scheme in the UK.
VAT
Value added tax. A tax added to the price of goods and services, comparable to a sales tax.
VCCs
Variable capital companies. A company structure used in Singapore that establishes a corporate entity for managing collective investment schemes.
vested
A present fixed right to future enjoyment of property. Does not depend upon the satisfaction of some future condition.
void
A transaction is void when it is a complete nullity and is incapable of confirmation.
voting shares
Entitle the shareholder to vote at general meetings of a company.
wealth tax
An annual tax levied in some European countries calculated upon the net wealth of a taxpayer.
Will
Document that disposes of a person’s estate upon death.
winding-up
Liquidation, dissolution of a company (qv).
withholding taxes (WHT)
Provision in some onshore tax legislation that obliges a payer of income such as company dividends or bank interest to deduct tax at source and pay the sum deducted over to the revenue authority.
XD-XD
Ex-dividend date. The date at which a stock begins trading without the value of its next declared dividend. Investors who purchase shares before this date are entitled to receive the upcoming dividend, while those who purchase on or after the ex-dividend date are not.