...

Absolute owner

This is the sole owner of a piece of property, such as a building, vehicle or piece of equipment.

...

...

Abstract of title

This is a document which summarises all the title deeds to a property such as a house. It is drawn up for the seller when a property is being sold.

...

...

Accounting date

Organisations prepare their annual accounts covering a period of 12 months. The last day of the period is called the accounting date.

...

...

Accrual rate

This is the rate by which a pension from an earnings−related occupational pension scheme builds up from one year to another. The rate is shown as a fraction or a percentage of the member'...

...

Accrue

If something is accruing, it is building up day by day. If an organisation owes money for goods and services but has not received a bill up to the date it prepares its accounts, it will estimate wh...

...

Accrued income security

This is a security (investment) which pays interest at regular intervals. When it is sold, interest may have built up and this interest will be paid to the new owner. Interest built up like this is...

...

Accumulation date

This is the date when income will be credited to a unit trust which reinvests its income (an accumulation unit), instead of paying the income out to the investors

...

...

Accumulation unit

The type of unit trust which reinvests the income it earns, instead of paying it out immediately to the investors, is called an accumulation unit.

...

...

Actuary

An actuary is an expert on pension scheme assets and liabilities, life expectancy and probabilities for insurance purposes (the likelihood of things happening). An actuary works out whether enough ...

...

Ad valorem

If a duty is ad valorem the duty varies with the price of the asset which is being transferred.

...

...

Additional voluntary contribution

People in occupational pension schemes can pay in extra money to increase their pension benefits. The extra money they pay in is an additional voluntary contribution.

...

...

Ademption

This happens when someone is left something in a will, but the item no longer exists so cannot be bequeathed.

...

...

Administration order

If a court appoints someone to look after a company's affairs the court issues an administration order. This order gives the person appointed power to run the company.

...

...

Administrator

This is someone who:

• has been appointed to manage the affairs of a bankrupt business; or

• has been appointed to manage the estate of someone who has died without leavin...

...

Advance corporation tax

Until 1999 this tax was paid by companies on the dividends they paid. The advance corporation tax paid could usually be offset against the corporation tax due on the company's profits.

...

...

AER

This stands for annual equivalent rate. It is quoted by financial institutions, such as banks, to show how much the interest rate would be if the interest was worked out just once a year. It is int...

...

Affidavit

An affidavit is a written statement which is sworn to be true by the person signing it. It is sworn before someone authorised by the court.

...

...

Allocation rate

When money is paid into a fund (such as a pension fund) the allocation rate is the percentage of the money left which can be invested after the charges have been taken off. For example, if the char...

...

Allotment

An allotment of shares in a company gives the owner (of the allotment) an unconditional right to buy the shares at a fixed price.

...

...

Alternate director

If a director appoints someone to take his or her place, the substitute is called an alternate director.

...

...

Annual accounts

These are the summary of an organisation's financial transactions during the year covered by their accounts, and a 'snapshot' of the assets and liabilities at the end of the year.

...

...

Annual general meeting (AGM)

This is the yearly meeting of the members of an organisation which must be held to meet legal conditions. The annual accounts are presented for approval at this meeting.

...

...

Annual management charge

This is a yearly charge made by the managers of unit trusts or investment trusts. It is usually a percentage of the value of the funds being managed.

...

...

Annual payment

An annual payment is an amount paid out every year, such as an annuity. It may be split up into smaller amounts and be paid out more frequently than once a year.

...

...

Annuity

An annuity is an amount paid out every year to someone. The money usually comes from an insurance policy. It can be split up into smaller amounts and paid out more frequently, such as monthly. It i...

...

APR

This stands for annual percentage rate. It is intended to give people a more accurate idea of how much they are being charged when they borrow money

...

...

Arbitrage

This is borrowing money to lend out again at a higher rate of interest.

...

...

Arrangement fee

This is the fee that banks charge their customers for arranging an overdraft facility.

...

...

Articles

A company's articles set out its rules. The articles form part of the memorandum and articles of association.

...

...

Assets

These are things which are owned such as buildings, vehicles, stock and money in the bank.

...

...

Assignment

This is the formal transfer of rights to something. For instance, a bank's customer may assign, to the bank, the right to receive the benefits from a life insurance policy to give the bank secu...

...

Attorney

An attorney is a person appointed to act for another person (such as when someone is unable to look after their own affairs). A formal document called a power of attorney is used to appoint the att...

...

Audit

An audit is an independent examination of an organisation's records and financial statements (report and accounts) to make sure that:

• the financial statements show a fair reflect...

...

Auditing standards

The organisations which regulate auditors, such as The Institute of Chartered Accountants in England and Wales, set standards which have to be followed during an audit. These are called auditing st...

...

Auditor's report

This is a report and opinion, by an independent person or firm, on an organisation's financial records.

...

...

Authorised share capital

This is the highest amount of share capital that a company can issue. The amount is set out in the company's memorandum of association.

...

...

BACS payment

BACS stands for Bankers Automated Clearing System which is a system for sending money electronically between banks. A BACS payment happens when money is sent electronically from one bank account to...

...

Bail

If someone is given bail, they are let out of prison until their court case. Usually someone has to pay, or promise to pay, an amount of money as a condition of bail being granted. If the accused p...

...

Bailee

A bailee is the person or organisation which looks after valuable items to keep them safe for the owner.

...

...

Bailiff

A bailiff is an officer of the court. The bailiff carries out the court's orders, such as taking goods belonging to a debtor and selling them to get money to pay the debts. The bailiff can also...

...

Bailment

This involves transferring possession of goods from the owner to someone else. The ownership of the goods is not transferred.

...

...

Bailor

A bailor is the owner of valuable items which are in the possession of another person or organisation for safekeeping.

...

...

Balance sheet

A balance sheet is a summary of an organisation's financial position. It lists the values, in the books of account on a particular date, of all the organisation's assets and liabilities. Th...

...

Balloon payment

Some loan and finance agreements have lower repayments than normal in return for a high final payment. This is called a balloon payment.

...

...

Bankruptcy

If someone cannot pay their debts when they are due to be paid, a court may issue a bankruptcy order against them. This order takes ownership of the debtor's property away from the debtor and a...

...

Bare trustee

A bare trustee holds property ‘on trust' for another person until asked to return the property.

...

...

Barter

This is a way of paying for things, without using money, by exchanging goods.

...

...

Basic−rate tax

Once you have used up all your tax allowances and all your lower−rate tax band, you pay basic−rate tax. The basic rate is 22% at the moment (2000).

...

...

Basic state pension

This is the retirement pension the Government pays to people who have paid enough national insurance contributions. Some people may receive a reduced basic state pension because they have not paid ...

...

Bear

A bear is someone who expects share prices to fall in the future and sells shares now so that they can buy them back later at a lower price.

...

...

Bearer

The bearer of a document is the person who has it in their possession.

...

...

Beneficial interest

If something really belongs to a person, even though they do not legally own it, they have a beneficial interest in it. If, for instance, parents hold an investment on behalf of their child, they a...

...

Beneficiary

This is someone who benefits from a will, a trust or a life insurance policy.

...

...

Benefit statement

If employees are in an occupational pension scheme, they receive regular benefit statements which explain how much pension benefit they have earned.

...

...

Benefits in kind

If an employee or a director gets benefits (perks) from their work, such as a company car, the benefits are called benefits in kind. They may have to pay tax on the value of the benefit in kind.

...

Bequeath

If you bequeath something, you leave it to someone in your will. You cannot bequeath land or real property but you can devise them.

...

...

Bequest

A bequest is something given in a will, other than land or real property.

...

...

Bid/offer spread

This is the difference between the bid price and the offer price.

...

...

Bid price

If you are a member of a unit trust, this is the price you will get for each unit if you cash them in

...

...

Bill of exchange

A bill of exchange is a signed written order, instructing the person it is addressed to to pay an amount of money to someone. A cheque is a type of bill of exchange.

...

...

Bill of lading

This is a document recording the goods a ship carries and the terms the goods are carried under.

...

...

Bill of sale

A bill of sale is a document which transfers ownership of goods from one person to another.

...

...

Bona vacantia

This means belonging to nobody.

...

...

Bond

A bond is a written promise to repay a debt at an agreed time and to pay an agreed rate of interest on that debt.

...

...

Bonus issue

If a company offers free shares to its shareholders in proportion to their existing shareholdings, it is called a bonus issue (or a scrip issue). The company accounts for it in its books by transfe...

...

Book debts

Book debts are the debts owed to a business, as recorded in the business's accounting records.

...

...

Book value

This is the value of a fixed asset, such as a building or machine, as recorded in an organisation's books. It is usually the amount paid for the asset less an amount for depreciation.

...

...

Books of account

These are the books which a business must keep to record its financial transactions accurately.

...

...

Bought note

Stockbrokers produce bought notes for their clients. The bought note shows details of the investments the broker has bought for the client, including the price paid and any commission and duty char...

...

Breach of duty

A breach of duty is failing to carry out something which is needed by law (or doing something the law forbids).

...

...

Breach of trust

A breach of trust happens if a trustee does something which is against the trust's rules or fails to do something needed by the trust's rules.

...

...

Brokerage

Brokerage is the commission earned by brokers.

...

...

Budget

Bach year, the Chancellor of the Exchequer presents to the UK parliament estimat...

...

Bull

A bull is someone who buys shares now because they expect the price to rise in t...

...

Buying Charge

This is the charge made when you first invest in a fund such as an ISA,
...

Call

A company makes a call when it asks buyers of its new shares to pay some or all ...

...

Called−Up Share Capital

When a company issues shares it asks the buyers to pay for part or all of the share price. The
name for this reque...

...

Cancelled From Inception (CFI)

This phrase refers to a contract for an investment product (such as a personal pension) which has
been cancelled within...

...

Capital Adequacy Requirement

Banks and some other financial organisations have to have a certain amount of capital to make
sure that there is enough...

...

Capital Allowances

You can sometimes claim capital allowances when you buy long−term
...

Capital Charge

If a unit trust manager takes the management charges out of the fund's capit...

...

Capital Commitment

If, before the end of its financial year, an organisation has agreed to spend money after the end of
its accounting per...

...

Capital Expenditure

If you spend money buying or improving fixed assets, it is called
...

Capital Gain

You make a capital gain if you sell or
...

Capital Gains Tax

This is a tax charged on certain capital gains.
...

...

Capital Receipt

This is money received from selling fixed assets, such as buildings or machines....

...

Capital Redemption Policy

A capital redemption policy is a life...

...

Capital Transfer Tax (CTT)

This was introduced in the 1970s to tax money and assets given away by people du...

...

Card

This is the plastic credit card or ca...

...

Cardholder

This is a bank customer who has been given a credit card or Read More...
...

Cash Card

A cash card can be used to draw money from automated teller machines (cash machi...

...

Cash ISA

You can invest money in a cash ISA to earn tax−free interest.
...

Cash Option (Or Commutation)

If you are in a pension scheme and take this option, you will receive a lump sum straightaway.
However, you will then g...

...

CAT Standard

The Government has created a system to show which ISAs meet stated stan...

...

Caveat

A caveat is a warning.
...

...

Caveat Emptor

This is a Latin expression which means 'buyer beware'. It is used to warn people buying goods that
they may not...

...

Chancellor of the Exchequer

The Chancellor of the Exchequer is a Government minister responsible for raising...

...

CHAPS

This stands for Clearing House Automated Payments System. It is a computer system which allows
payments to be made elec...

...

Charge Card

A charge card is a type of credit car...

...

Charge Certificate

The Land Registry issues this certificate to the legal mortgagee (the lender) who has lent money on
the
...

Chargeable Asset

This is an asset on which capital gai...

...

Chargeable Event

If a chargeable event happens, it may create a tax (tax bill)
...

...

Charging Clause

If this clause is written into a trust, trustees can charge the
...

Charity

A charity is an organisation set up to help needy causes.
...

...

Cheque

A cheque is a written order, addressed to a bank, instructing the bank to pay an...

...

Cheque Card

This type of card is issued by a bank to a customer. It guarantees that a...

...

Chief Rent

A chief rent is money charged regularly on land, but it is not rent.
...

Close Company

A close company is one controlled by five people or fewer or by its directors. <...

...

Collateral

If there is a main security for a debt, such as a house securing a
...

Collector of Taxes

After the inspector of taxes has worked out how much tax is owed, the
...

Commercial Paper

Large organisations which are regarded as soundly based financially can borrow money for the
short term without giving ...

...

Company Pension Scheme

 
This is a pension scheme organised by the employer to provide pension benefits
...

Compensation

Compensation is money given to make up for damage caused.
...

...

Completion

When there is a contract to sell land, the
...

Compound İnterest

Compound interest is interest on the money lent, plus interest on any interest already added to
...

Condition

A condition is an essential part of an agreement. The agreement or
...

Consumer Credit Act 1974

This act sets out the rules which lenders must follow when they lend amounts of £15,000 or less to
consumers.
...

Contingent Annuity

This is an annuity which is paid to someone when someone else dies
...

...

Contingent Liability

This is money which might be owed if a particular event happens.
...

...

Contract

A contract is an agreement between two or more people (or groups) to do (or not ...

...

Contract in

Members of occupational pension schemes can Read More...
...

Contract Out

If someone contracts out of the state...

...

Conversion

This is changing the type of bank account you have.
...

...

Conveyance

This is the name of the document which transfers the ownership of land.
...

...

Conveyancing

This is the name for carrying out all the actions needed to transfer the ownership of a piece of land.
...

...

Corporate Body

This is a group of people acting together. The group has a separate legal identity to the individual
members' ident...

...

Corporation Tax

This is a tax companies pay on their profits.
...

...

Council Tax

This is a tax charged locally on private houses. It provides some of the money to run local councils.
...

...

Coupon

A coupon is a dated piece of paper attached to a Read More...
...

Covenant

A covenant is a contract.
...

...

Credit

A credit is:
...

Credit Agreement

This is a written contract between a bank or other lender and a customer. The ba...

...

Credit Card

A credit card is an identity card
...

Credit Limit

This is the most a customer is allowed to borrow on their account
...

...

Credit Reference Agency

This is an organisation which keeps records of people's credit agreements an...

...

Credit Scoring

This is a way of working out the risk of not being repaid if money is lent. Points are awarded for the
answers given by...

...

Credit Transfer

A credit transfer involves transferring money from one bank to another. <...

...

Creditor

This is someone who is owed money
...

...

Critical Illness Cover

This is a type of insurance cover which pays out if the policyholder gets a serious illness such as
heart disease or ca...

...

Cum−dividend

If a share is sold cum−dividend, the buyer will receive the
...

Cumulative Market Capitalisation

This is the total market capitalisation of all the companies in the sec...

...

Current Assets

These are short−term assets which are constantly changing in valu...

...

Current Liabilities

These are short−term liabilities which are due to be paid in less than one...

...

Damages

Damages is the name for money awarded by a court as compensation
...

Data Protection Act 1984

This act sets out the rules which an organisation has to follow when they store personal information
about people.
...

De Facto

De facto means in fact or in reality.
...

...

Debenture

This is a document issued by a company which acknowledges that some or all of the company's
assets...

...

Debit

A debit is:
...

Debit Card

A debit card is an identity card issued by a bank to a customer which the custom...

...

Debt Securities

These are debts which can be bought and sold, such as debentures.
...

...

Debtor

This is someone who owes money.
...

...

Default

If someone defaults, they fail to do something which they had agreed to do
...

...

Deferred Taxation

This is tax which is expected to be paid at some time in the future but is not due in the short term.
Payment has usual...

...

Defined Contribution Pension Scheme

In this type of pension scheme the amount of the pension which will be paid out depends on how
much has been invested a...

...

Dependant

A dependant is someone who depends on someone else for financial support....

...

Deposit Account

This is a bank account in which money is saved. It normally pays interest on the money invested.
...

...

Deposit Rate

This is the rate of interest customers earn on money they keep in a bank deposit account Read More...
...

Depreciation

Depreciation is the drop in value of an asset
...

Depreciation Provision

This is money set aside (or provided) in a set of accounts to reflect the drop in value of fixed
...

Determination

Ending an agreement is called determination.
...

...

Devise

Devise means to leave land in a will Read More...
...

Direct Debit

This is a payment out of a bank account which is arranged by the organisation which receives the
money.
...

...

Directors Report

 
Every year, company directors have to prepare a report for the company's members, to explain
wha...

...

Discretionary Trust

In this type of trust the trustees
...

Disposal

This happens when something is sold, transferred or given away.
...

...

Distribution

If a company pays money (or other assets) to its shareholders, it is making a
...

Dividend

If a company has profits to share out, it can pay a dividend. The shareholders g...

...

Dividend Warrant

When companies pay a dividend they send each shareholder a Read More...
...

Domicile

Your domicile is the country where your permanent home is, even if you are livin...

...

Domiciled

This means permanently based in a country
...

...

Drawee

In the case of a cheque, this is the bank that will pay the Read More...
...

Drawer

This is the person or organisation which has drawn a cheque.
...

...

Duty

Duty is a levy charged by the Government, usually when things are bought, such as shares or
...

Earnings−related

If something, such as a pension contribution, goes up in line with increases in earnings, it is
described as
...

Easement

An easement is a right to use someone else's land, such as a right of way. <...

...

Effects Not Cleared (Uncleared Effects)

When cheques have been paid into a bank account, but the money for them has not ...

...

Emoluments

These are your earnings and they include benefits in kind (such as company cars)...

...

Employer's Liability

Employers have to take out insurance cover, called Read More...
...

Endorsement

An endorsement is a change to a contr...

...

Endowment Policy

If you have this type of insurance policy, it will pay out a lump sum on a fixed...

...

Enduring Power of Attorney

If a person is capable of dealing with their own affairs at present, they can sign an enduring power
...

...

Equitable Mortgage

When a person takes out this type of mortgage they still own the property which ...

...

Equity

Equity is the value of something (such as a house) less money owing on it.
...

...

Eurocheques

These are cheques issued by banks in Europe which are used with a eurocheque car...

...

Excess

This is the amount by which someone has gone over their agreed overdraft facility
...

Exchange Control

The Bank of England controls the flow of currencies in and out of the UK. It buys and sells our
currency in to try and ...

...

Exchange Equalisation Account

This is an account kept by the Bank of England. It holds the United Kingdom's foreign exchange
<...

...

Exchange of Contract

When land is sold, the person selling (seller) and the buyer both sign identical copies of the
contract
...

Exchange rate

The exchange rate is the value of one currency compared to another. For example,...

...

Exclusion

If an insurance policy does not provide cover for certain things, it will list t...

...

Ex−dividend

If a share is sold ex−dividend the seller will receive the
...

Execute

This means to carry out a contract.
...

...

Executed

If a document is made valid (in the eyes of the law), such as by being signed or sealed, it is
executed
...

Executor

This is a man appointed in a will to deal with the estate, according to the wish...

...

Executrix

This is a female appointed in a will to deal with the estate, according to the w...

...

Exempt

If something is exempt from tax, no tax can be charged on it unless the law is c...

...

Facility

This is the agreed amount that a bank will allow a customer to borrow up to.
...

...

Final Dividend

Once a company has drawn up its annual accounts the directors can work out and d...

...

Finance Lease

Under this type of lease the organisation leasing the goods is treated as if it owns the goods. It
gains the profits th...

...

Financial Statement

This is a statement which includes the annual accounts,...

...

Financial Year

This is the year covered by a set of annual financial statements.
...

...

Fiscal

This word is used to describe finances controlled by the Government.
...

...

Fixed Asset

A fixed asset is one which is intended to be used for several years. Examples ar...

...

Fixed Interest Rate

This is an interest rate which does not change during the life of a loan.
...

...

Floating Charge

A floating charge is used to provide ...

...

Floating Exchange Rates

These are exchange rates between currencies which are allowed to go up and down ...

...

Forbearance

This is when one party to an agreement does not pursue their rights even though another party to
the agreement has not ...

...

Force Majeure

This is an event which cannot be controlled and which stops duties, under an agreement, being
carried out.
...

...

Foreign Exchange

This is the term for foreign currencies which are bought and sold. The markets for buying and
selling the foreign curre...

...

Franked Investment Income

This is a company's investment income which has tax credits relating to it. ...

...

Free−Standing AVC

This stands for free−standingadditional voluntary contribution. If someone is in an employer's
scheme, which ...

...

Fully Paid Share

A share becomes fully paid when the company issuing it has received all the mone...

...

Fund Management Charge

The managers of funds (such as investment trusts and Read More...
...

Gift

A gift is a transfer of goods or property which is free of charge.
...

...

Gilt−Edged Securities

These are first−class securities such as government stocks or local author...

...

Gross Domestic Product

This is the value of goods and services produced by an economy over a particular time period.
...

...

Gross Interest

This is interest which has not had any income tax taken out of it.
...

...

Gross Profit

Gross profit is the difference between the selling price of goods and what they cost to buy.
...

...

Ground Rent

A ground rent is a rent created by a long−term lease of land
...

...

Guarantee

A guarantee is sometimes needed before a bank will lend money to a customer. Ano...

...

Guaranteed Minimum Pension

This is the lowest level of pension which must be paid to a pensioner, as a condition of contracting
...

...

Headline Rate

This term refers to information which is easy to publish but which may be over−simplified and, as a
result, possi...

...

Hire Purchase

This is a form of credit which allows the purchaser to have possession ...

...

Holding Company

This is a company which controls another company, usually by owning more than half of its shares.
...

...

Hypothecation

This happens when a person gives a bank authority to sell goods which have been pledged as
security
...

Incapacity Benefit

Incapacity benefit is paid to people who are too ill to work.
...

...

Income and Expenditure Account

This account records an organisation's income and spending and shows the surplus or shortfall.
...

...

Income Drawdown

Under this system, people with personal pensions can take money from their
...

Income Tax

You pay this tax according to how much income you have under various categories.
...

...

Income Unit

This is a unit trust which pays out the income it earns to the investors, instea...

...

Incorporated

If a company is formed which has its own identity separate from the identities of its members, it is
incorporat...

...

Incorporation

This means forming a company. Some companies have limited liability. In other wo...

...

Indemnity

If someone promises to compensate someone else for loss or damage, it is called an indemnity Read More...
...

Independent Financial Adviser (IFA)

This is a qualified person or firm that can give people independent advice on life insurance and
pensions and is not ti...

...

Indexation

This means making adjustments to allow for the effects of inflation.
...

Individual Savings Account (ISA)

This is a savings account which was introduced 6 April 1999. The income earned by the money
invested will be free of ta...

...

Inflation

This is the name for general price increases.
...

...

Inheritance Tax

This tax is charged on certain gifts, and on the value of the estate left by someone who has died.
...

...

Input Tax

This is the value added tax you pay when you buy goods and services.
...

Insolvent

If debts cannot be paid when they are due for payment, the person or organisation owing the
money is
...

Inspector of Taxes

This is a person who works for the Inland Revenue, dealing with tax returns and ...

...

Insurance

When policyholders pay premiums to buy insurance cover, the company receiving th...

...

Intangible Assets

Intangible assets cannot be touched. Examples are goodwill and patent rights.
...

...

Intellectual Property Rights

This is the general name for rights such as copyrights and patents.
...

...

Interest Rate Swaps

If you are earning variable interest on money you have deposited at your bank, but you are worried
that interest rates ...

...

Interim Dividend

The directors of a company can review the company's performance part way through the financial
year and declare a
...

Intestacy

This happens when someone dies without leaving a will. Their estate is divided u...

...

Investment Grade Issuers

These are soundly based companies of the highest quality.
...

...

Investment Trust

This is a company which is quoted on the stock exchange and which invests in other companies.
...

...

ISA

This is an individual savings account. The interest earned from an ISA is free o...

...

Issued Share Capital

This is share capital which has been allocated to shareholders who have subscribed for (asked for)
shares.
...

Joint Lives

Some life insurance policies cover two people's lives and pay out on the fir...

...

Joint Lives Last Survivor

This sort of life insurance is on two people's lives and pays out on the sec...

...

LAPR

This stands for life assurance premium relief. Before 14 March 1984 there was ta...

...

Lapse

If a policy becomes void because conditions have not been kept to (such as failing to pay
premiums), it has
...

Legacy

A legacy is a gift left to someone in a will, but it does not include land.
...

Legal Mortgage

When a person takes out this type of mortgage the lender owns the property which...

...

Letter of Credit

This is a letter one bank sends to a second bank asking them to pay money to a named person.
However, certain condition...

...

Liabilities

These are debts that a person or an organisation owes.
...

...

Licensed Conveyancers

These are the only people, other than solicitors, who are allowed to do conveyancing Read More...
...

Lien

A lien is the right to keep possession of something, owned by someone who owes a...

...

Life Assurance (or insurance) Policy

This type of policy is a contract between the policyholder and the
...

Life Assured

This is the person whose life is assured.
...

...

Life of Another

If you take out assurance cover on another person's life, you have taken it out on the life of
<...

...

Limited Company

This type of company limits how much its members will have to pay if the company...

...

Limited Liability

If a company is set up with limited liability for its Read More...
...

Liquidation

This is the process of winding up a company by paying its Read More...
...

Lower Earnings Limit

If you earn below this limit, you do not pay national insurance contributions.
...

Mandate

A bank's customer writes instructions on the mandate for the bank to follow ...

...

Market Capitalisation

If you multiply the number of ordinary shares a company has issued by their market price, you get
the
...

Mature/Maturity

If an investment policy comes to the end of its life, it has reached maturity.
...

Maxi ISA

A maxi ISA includes investments in stocks and shares and may also allow investme...

...

Median

In statistics the median is the point where half the items in a series are on on...

...

Member

The shareholders of a company are its members
...

...

Memorandum and Articles of Association

The memorandum gives details of a company's name, objects (purposes) and sha...

...

Merchant Bank

his is a specialist bank which deals in foreign exchange and advises large...

...

Middle−Band Earnings

 
These are earnings between lower−band earnings and
...

Mini ISA

There are three types of mini ISA you can invest in, these being cash,
...

Minority Interest

If more than 50% of the shares in a company are held by a holding company, the r...

...

MIRAS

This stands for mortgage interest tax relief at source. It was income tax relief on mortgage Read More...
...

Mortgage

A mortgage is using a property as sec...

...

National Insurance Contributions

Most employees, employers and the self−employed pay national insurance contributions Read More...
...

Negotiable Instrument

This is a document which :
is signed;
...

Net Book Value

This is what an asset cost, as recorded in the books of account, less all the
...

Net Interest

This is interest which has had income tax taken off it.
...

...

Net Profit

This is the profit left after all overheads have been taken off.
...

...

Net Relevant Earnings

These are the earnings of self−employed people or earnings of people who are not in an
employer's pension sch...

...

Nominal Damages

When token damages are awarded because little damage has been done, they are called nominal
...

Non−Profit

A non−profit organisation is one which is not intended to make a profit, s...

...

Note

A note is a document acknowledging that a debt exists and promising to repay tha...

...

Occupational Pension Scheme

This is a pension scheme organised by an employer to provide pension benefits fo...

...

Offer Price

This is how much people have to pay for each unit when investing in unit trusts.
...

...

Official Receiver

This is a person appointed to act as a receiver in Read More...
...

Open Ended Investment Companies (OEICs)

An OEIC is a type of unit trust
...

Operating Lease

Under this type of lease, ownership of the leased goods stays with the lessor (the company leasing
out the goods).
...

Operating Profit (or loss)

The profit (or loss) from a company's principal (main) trading activity.
...

...

Opting Out

If an employee leaves an occupational pension scheme, or chooses not to join one...

...

Option

Under this sort of contract, paying an amount of money gives a right to buy or s...

...

Orders Not To Pay

If a bank's customer asks the bank not to pay a cheque, the bank may write
...

Ordinary Resolution

If a resolution can be passed at a meeting by more than half of those voting agreeing to the
resolution, it is an
...

Out of Date

If a cheque is dated more than six months before the date when it is presented f...

...

Output Tax

This is the value added tax (VAT) charged by a business registered for VAT, on t...

...

Overdraft Facility

If a bank agrees to let a customer borrow from the bank by taking out more than the customer has
in the bank, an overdr...

...

Paid−Up Share Capital

This is the money paid on shares allotted to the Read More...
...

PAYE

An employer collects income tax and n...

...

Payee

This is the person money is being paid to.
...

...

Payment Countermanded

If a bank's customer asks the bank not to pay a cheque, the bank may write &...

...

Payment Protection İnsurance

This insurance covers people's finance agreement repayments if they cannot work because of
long−term illness ...

...

Pension Benefits

The pensions and lump sums people receive from their private pensions are called pension
...

Pension Mortgage

This is a mortgage which will be repaid out of the lump sum from a pension polic...

...

Pensionable Age

This is the age people have to reach to be entitled to draw their state pension....

...

PEP

PEP
This stood for personal equity plan. It was a way of investing in stocks and shares through a
...

Permanent Assurance

This is life assurance cover on someone for the rest of their life.
...

Permanent Health İnsurance

This is a type of insurance policy which pays an income if the policyholder suff...

...

Personal Allowance

People do not have to pay income tax on all their income. Everyone gets a...

...

Personal Guarantee

This is a pledge by a person to a bank to repay a debt if the bank's customer fails to pay it.
...

...

Personal Pension

Self−employed people or people who are not in an occupational pension scheme Read More...
...

Personal Representative

If someone dies, a personal representative is appointed to deal with the dead pe...

...

PIN

This stands for personal identification number. It is a secret number given to an account holder to
be used when they p...

...

Please Represent

If a bank has refused to pay a cheque because there was not enough money availab...

...

Pledge

If someone pledges goods, they let a second person take possession of the goods,...

...

Poll

When a company has a poll vote, each shareholder has one vote for each share the...

...

Post−dated

If a cheque is written with a date in the future, it is '
...

Post Dated (No Represent)

If a cheque is returned unpaid
...

Power of Attorney

A power of attorney is a document which gives power to the person appointed by i...

...

Premium

This is the money the policyholder pays to the insurance company in return for t...

...

Prepayment (Prepaid)

In a set of accounts this means something which has been paid out which covers a period after the
end of the acco...

...

Present

When a bank sends a cheque it has received to the bank which has to pay it, it i...

...

Principal Activity

This is a company's main trading activity.
...

...

Private Limited Company

A private limited company cannot sell its shares to the public and is not listed...

...

Pro Rata

This means in proportion to. For example, if ten items cost £100, you would expect three items to
cost £30,...

...

Probate

When someone dies, the executors of the dead person's estate apply to the co...

...

Profit and Loss Account

A profit and loss account shows the money a business has earned from selling goo...

...

Promissory Note

This is a written promise to pay an amount of money to someone at a given time or on demand.
...

...

Prospectus

If a public company wants to people to invest in it, it prepares a
...

Provision

When accounts are being prepared and an amount needs to be set aside for liabilities Read More...
...

Proxy

This is a person appointed by a shareholder to go to a meeting of shareholders. The proxy Read More...
...

Proxy Form

If a proxy form is delivered to the company at least 48 hours before the shareho...

...

Public Liability

This is a type of insurance cover to protect people and businesses from claims m...

...

Public Limited Company (PLC)

A public limited company can offer its shares to the public and is often listed ...

...

Purchased Life Annuity

A person can buy this type of annuity from an...

...

Put Option

This is a right to sell foreign currency at a particular exchange rate. <...

...

Qualifying Policy

This is a policy which can pay its proceeds, free of tax, if the conditions have...

...

Quartile

In statistics the quartile point is the spot where one quarter of the items in a...

...

Quorum

A quorum is the lowest number of qualifying people needed for a meeting to be va...

...

Rate of Risk

If an investment carries more risk it is expected to deliver better returns than a lower−risk
investment. ...

...

Real Property

This is land and rights over land (such as an easement).
...

...

Receivership

If a company defaults in repaying a s...

...

Redemption

Redemption means paying off all the money borrowed under an agreement.
...

...

Refer to Drawer

A bank writes 'refer to drawer' on a<...

...

Refer to Drawer−Please Represent

If this is written on a cheque which is returned, the bank sending the
...

Related Party

This is someone, or an organisation, which controls or significantly influences another organisation.
...

...

Remedy

This is using the law to get compensation for damage done or for rights infringed. A remedy Read More...
...

Rent

Rent is the term used to describe a payment for using land, buildings or equipment
...

...

Rentcharge

This is the name for a charge to use land such as a chief rent but it does not i...

...

Representations

These are facts borrowers give to lenders about themselves when they apply to borrow money.
...

...

Reserves

These are amounts set aside in one year's accounts, which can be spent in later years. Some
types of
...

Retained Profits (or Losses)

Retained profits are those profits earned by a business which have not yet been spent.
...

...

Retirement Annuity

Retirement annuities are still in existence though none have been started since June 1988. They
...

Reversion

If the owner of a piece of freehold property leases it to someone else for a period, the freehold
property is in...

...

Rights Issue

This is an issue of extra shares by a company. Existing shareholders can buy extra new shares in
proportion to the shar...

...

Schedule A-D-E

Schedule A rules were used to work out income tax
...

Scrip Dividend

Sometimes companies will offer to pay dividends in shares instead of cash if sha...

...

Scrip Issue

If a company offers free shares to its shareholders in proportion to their existing shareholdings, it is
called a
...

Security

This is something of value which is pledged to a bank by a borrower. If the borrower fails to repay
the debt, the bank ...

...

Securities

This term is used for stocks, shares, debentures and so on where there is a righ...

...

Self−Assessment

This is a system for taxpayers to work out the tax they have to pay. However, if they send their tax
returns to the Inl...

...

Share Capital

Share capital is the money invested directly in a company by its members...

...

Share Certificate

This document certifies who owns shares in a company. It gives the type and number of shares
owned by the shareholder a...

...

Share Premium Account

If shares are issued for more than their face value, the extra amount over face value is called a
share premium. The to...

...

Show of Hands

If voting is on this basis, each person who can vote has one vote only.
...

...

Sickness Benefit

Sickness Benefit has now been replaced by Incapacity Benefit
...

Sine Die

If a meeting is adjourned sine die, no date has been set for it to be continued....

...

Sold Note

Stockbrokers produce sold notes for their clients. The Read More...
...

Sole Trader

A sole trader is someone who is in business on their own. They have no business ...

...

Sort Code

Each bank branch is given an identification number which is called a sort code. ...

...

Spot Rate

This is the exchange rate for foreign...

...

Stakeholder Pension

The Government has announced plans for the stakeholder pension which is a type o...

...

Stamp Duty

Stamp duty is a tax on the transfer documents for certain types of transaction. Examples are the
...

Standard & Poors

This organisation rates companies according to their financial strength
...

...

Standing Order

This is an instruction by a bank's customer to the bank, to pay an amount of money regularly to
another bank accoun...

...

State Earnings Related Pension Scheme (SERPS)

People working for an employer can earn this extra state pension. They pay extra...

...

State Pension Scheme

The Government pays a basic state pension to everyone who has paid the minimum
...

Statistical Sampling

This involves the randomly choosing of items to be tested, and then using probabilities (the
likelihood of things happe...

...

Statutory Accounts

Statutory accounts are company accounts which have been filed with the Registrar of
...

Statutory Audit

By law, certain companies have to have their accounts audited by suitably qualified accountants.
This is called a
...

Statutory Books

By law, companies must keep books of account to show and explain all their transactions. These
are called
...

Statutory Sick Pay

Employers have to pay this to employees who are off work because of sickness. The Government
...

Stockbroker

A stockbroker buys and sells stocks and shares for clients.
...

...

Stock Control

Stock control is a system for keeping adequate control of stock levels and for preventing stock
...

Stock Exchange

A stock exchange is a market for stocks and shares. Organisations can raise capi...

...

Stock in Trade

This is the term for goods bought but which have not yet been sold.
...

...

Sub Judice

If something is sub judice, it is being dealt with by the court and cannot be di...

...

Subscribers

Subscribers are the people who set up a limited company.
...

...

Subsidiary

A subsidiary is a company controlled by another company. The control is normally...

...

Superannuation

This is a regular contribution to a pension scheme by an employee.
...

...

Surcharge

This is an extra charge banks make if a customer does not keep to their agreement with the bank.
...

...

Surety

A surety is someone who takes responsibility for someone else's debts or pro...

...

Surrender Value

If a policyholder cancels a life policy early, the insurance company will pay th...

...

SWIFT Payment

SWIFT stands for Society for Worldwide Interbank Financial Telecommunications and it is an
...

Tangible Assets

If an asset can be physically touched, it is a
...

Tax Allowance

Taxpayers are given tax allowances to reduce the amount of tax they have to pay....

...

Tax Avoidance

Reducing tax bills by using legal means is called tax avoidance
...

...

Tax Code

The Inland Revenue work out the allowances for each taxpayer paying PAYE. The to...

...

Tax Credit

When companies pay dividends they send each shareholder a Read More...
...

Tax Evasion

Breaking the law to reduce tax bills (such as by concealing income) is called tax evasion Read More...
...

Tax Month

The tax year is split up into 12 monthly periods. The first
...

Tax Point

The tax point is the date when value ...

...

Tax Return

The Inland Revenue sends these forms out to taxpayers each year. Income and gains for the year
are declared on the form...

...

Tax Voucher

This is the same as a dividend warrant.
...

...

Tax Week

The tax year is split up into 52 tax ...

...

Tax Year

The tax year starts on 6 April and finishes on 5 April in the following year.
...

Taxable Supply

This is a term for supplying of goods and services on which value added tax can ...

...

Teeming and Lading

This is a term used to describe attempts to hide the loss of cash received from one customer by
using cash from another...

...

Tender

If an organisation asks firms to send in tenders to supply something, they are asking for firm written
offers to do the...

...

Term

A term is any of the clauses which form part of a contract.
...

...

Term Assurance (or Temporary Assurance)

This is life insurance cover for a fixed period of time.
...

...

Term Deposit

This is money deposited with a bank for a fixed period of time.
...

...

Term Loan

Banks offer these loans to companies for a fixed time period.
...

...

Terminal Bonus

A terminal bonus is one the insurance...

...

TESSA

This stands for Tax Exempt Special Savings Account. It is a special savings account with banks,
building societies and ...

...

Title Deeds

These are the documents which prove who owns a property and under what terms.
...

...

Tracker Fund

Tracker funds invest in the same shares and in the same proportions as those reflected in the
<...

...

Trade Creditors

These are the organisations which are owed money for goods and services supplied
...

...

Trade Debtors

These are the organisations which owe money for goods and services supplied.
...

...

Trading Account

A trading account is the part of a pr...

...

Trading Profit

The trading profit is the profit from selling goods and services before taking o...

...

Transferable Securities

These are securities, such as debentu...

...

Transferee

This is the person something is transferred to
...

...

Transferor

This is the person who transfers something to someone else.
...

...

Treasury Bill

This is an unconditional written promise by the Treasury to repay money it has borrowed for the
short term, to pay for ...

...

True and Fair View

When auditors examine an organisation's accounting records and annual accounts Read More...
...

Trust

A trust is a financial arrangement under which property is held by named people ...

...

Trust Deed

 
This is a legal document which is used to:
    ♦ ...

...

Trust Corporation

A company which acts as a trustee and holds the Read More...
...

Turnover

A business's turnover is the total value of its sales over a particular peri...

...

Uncleared Cheque

This is a cheque which has been paid into an account, but the payment for it has...

...

Underwriting

When the public is invited to subscribe for (ask for) shares in a company the directors may ask an 
investment firm, such ...

...

Unincorporated Body

This is a group of people acting together but who do not form a separate legal body (such as a
company)
...

...

Unit−linked

Some investment policies, such as endowment policies, are used to invest in
...

Unit Trust

People can invest in unit trusts by buying units. The managers of the
...

Unitised

This term describes investors joining together to buy units in a fund such as a unit trust Read More...
...

Unitised With Profit

People with this type of with−profits policy have a share of the
...

Unlimited Company

This type of company does not limit what its members would have to pay towards t...

...

Unpaid İtem

This is an item such as a cheque, sta...

...

Unpresented Cheque

This is a cheque which has been sent, but which has not yet appeared on the bank...

...

Unsanctioned Overdraft

This is an overdraft which has been run up without the bank's permission
...

Upper Earnings Limit

This is the highest amount of earnings on which employees pay national insurance
...

...

Valuation Point

This is the date and time when the fund manager revalues the investments in a fund, such as a
unit trust.
...

Value Added Tax (VAT)

Most traders in the UK are registered for VAT. This means that registered trader...

...

Waiver of Premium

If a member of a scheme with this benefit becomes seriously ill or disabled and ...

...

Warrant

A warrant is a certificate which gives the person holding it the right to buy sh...

...

Whole−life Assurance

This is life assurance cover which lasts the lifetime of the person whose life i...

...

Will

A will is a legal document which people use to
...

Winding Up

Winding up a company is done by paying the company's creditors,
...

With−profits Policy

A policyholder with this type of life insurance policy shares in the surpluses o...

...

Zero−rated

This means:
    ♦ that the rate of interest is 0%; or
...

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2023

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