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Jargon Buster

Administrators

The people appointed to administer a deceased person’s estate when there are no executors.

Agricultural property relief

A relief from IHT for certain types of agricultural property.

A&M Trust

An accumulation & maintenance trust; a special trust created for children/grandchildren who had to receive at least the trust income by no later than age 25. Could be created during lifetime or in a will. Since FA 2006 it is no longer possible to create an A&M trust.

Annual exempt amount

The amount of capital gains an individual or trust can make before being subject to CGT.

Arising basis

The basis of taxation where all income and gains are taxed in the tax year in which they arise, irrespective of whether they are physically brought into the UK (see remittance basis).

Added Years

In defined benefit arrangements, additional period of pensionable service can be granted. Added Years usually arise out of use of the scheme's augmentation power.

A-Day

6 April 2006 - in effect, the date on which the new pensions regime under the Finance Act 2004 came into force.

Active Member

A person currently accruing benefits in a pension arrangement (as distinct from Deferred Members and Pensioner Members).

Actuarial Valuation

A review of the assets and liabilities of a defined benefits pension arrangement. The level of funding is assessed and recommendations made by the scheme actuary - which may include the level of on-going contributions and any measures required to reduce a deficit. The Institute of Actuaries website contains useful information. www.actuaries.org.uk

Appropriate Personal Pension Plans

A type of personal pension plan used to allow members to contract out of the state second pension.

Alternatively Secured Pension

A way of paying regular income out of a money purchase arrangement for those over age 75.

AVR

Actuarial Valuation Report

AVCs

Additional Voluntary Contributions

ASP

Alternatively Secured pension

Authorised Payment

An important concept under the FA04 regime. There is now a specific list of what is an authorised payment which can be made from a pension arrangement with the attendant tax advantages. With admirable logic, HMRC deems anything which is not an authorised payment to be an unauthorised payment - and that carries with it potentially severe tax consequences.

APP

Appropriate Personal Pension Plan

Administrator (or Scheme Administrator)

HMRC requires that there be a person responsible for complying with certain legislative requirements. In occupational schemes it is usually the trustees. This is distinct from the administrator appointed by the trustees to perform the general day-to-day administration of the scheme.

Approval

Pension schemes or arrangements used to be referred to as "Approved" - that was under the pre-2004 regime. Schemes or arrangements are now "Registered" with HMRC, rather than approved.

Annual Allowance

The annual tax-advantaged amount a member can save through a pension arrangement.

Annual Report

The disclosure regulations require trustees to make available certain information to members. Usually, trustees provide a simple annual report to members with a summary of the key financial and investment information.

Additional Voluntary Contributions

Where a scheme member elects to pay extra contributions over and above any ordinary contributions required by the scheme's rules. AVC's are then used to buy additional pension.

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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