Copy of `HMRC - UK taxation terms`

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HMRC - UK taxation terms Category: Business and Law > Tax glossary Date & country: 28/03/2012, UK Words: 221

Exempttransfer
An exempt transfer is one that is wholly covered by one or more exemptions.

Exemption
Some gifts are exempt from inheritance tax because the gifts are covered by exemptions. See exempt gifts for details of the exemptions from inheritance tax which may apply.

Exemptgifts
Gifts that are exempt from inheritance tax. These include

Exemptestate
A type of excepted estate where the gross value of the estate does not exceed £1,000,000 and there can be no liability to inheritance tax because spouse or civil partner exemption or charity exemption bring the estate below the inheritance tax threshold. Some restrictions apply to this and further details can be found in our guide: Is it an e...

Executrixnominate
A woman who administers a deceased person's estate in Scotland and is named in the will.

Executrixdative
A woman who is appointed by the courts in Scotland to administer a deceased person's estate; usually where there is no will or they are not named in the will.

Executrices
Plural of executrix.

Executrix
A woman who administers a deceased person's estate in England, Wales and Northern Ireland and is named in the will.

Executornominate
A man who administers a deceased person's estate in Scotland and is named in the will.

Executordative
A man who is appointed by the courts in Scotland to administer a deceased person's estate; usually where there is no will or they are not named in the will.

Executor
A man who administers a deceased person's estate in England, Wales and Northern Ireland and is named in the will.

Excludedproperty
The term 'excluded property' is a technical term and covers certain types of property which, subject to certain conditions, are outside the charge to IHT. Excluded property includes

Exceptedestate
An estate where a full inheritance tax account is not required. From 6 April 2004 there are three types of excepted estate

Exceptedasset
An asset on which business relief is not available because it is not used wholly or mainly for the purposes of a business throughout the two years before a transfer. For more information, see the guide on Business Relief.

Enduringpowerofattorney
A power of attorney which is not revoked by any subsequent mental incapacity of the person granting the power.

Employeetrust
A discretionary trust set up to benefit employees of a particular occupation or firm and the relatives and dependants of those employees. For more information on employee trusts, please see our guide - What are special trusts?

Emolument
The payment that is made for work that has been done including salary, bonuses and some other forms of benefit in kind.

Duedate
Date on which the Inheritance Tax is due. See the guide: 'When Inheritance Tax is due - payment deadlines'. The IHT manual has details of due dates for the tax on immediately chargeable transfers.

Doubletaxationconvention
A treaty which helps prevent a transfer from being taxed by two countries if both countries have the right to tax the same property when a death occurs or a gift is made.

Donee
A person who receives a gift.

Donor
A person who makes a gift of some of their assets.

Domicileoforigin
This is acquired by a child at birth and is usually the domicile of the child's father at that time. It need not be the country in which the child is born.

Domicileofdependency
Under the age of 16 a child has the same domicile as the person on whom they are legally dependent. This is called a domicile of dependency.

Domicile
Generally, a person's domicile is where they have their fixed and permanent home and to which, when they are absent, they always have the intention of returning.

Disposition
A disposal or transfer of property or cash, including both the creation and the release of any debt or right. The legislation specifically includes certain types of transfer and more information can be found in the Inheritance Tax Manual.

Discretionarytrust
A trust under which no individual has a right to an interest in possession. Generally, the trustees have the power to decide who should receive the capital or income from the trust. Discretionary trusts are also relevant property trusts.

disabled
A trust where more than half of the assets in the trust are applied for the benefit of a disabled person. Or, for trusts set up on or after 22 March 2006, a trust set up for their own benefit by a person who is suffering from a condition which can be expected to lead to them becoming disabled.

Disabledperson
For inheritance tax purposes a disabled person is someone who, because of a mental disorder, is not capable of managing their own affairs or administering their own property or someone who is in receipt of attendance allowance or a disability allowance because they are entitled to the care component at the higher or middle rate.

Directpaymentscheme
Scheme by which the inheritance tax that is due can be paid by transferring the funds directly from the deceased's bank account. More details about this scheme can be found in the IHT400 Notes - Guide to completing your Inheritance Tax account.

dep
A dependant of a registered pension scheme is defined as a person who at the time of the scheme member's death was

Determination
See notice of determination

DeedofVariation
See variation

Deemeddomicile
A legal concept for inheritance tax purposes where a person is treated as if they were domiciled in the UK at the time of a transfer if

Corporealmoveables
The Scottish term for chattels.

Compensationfunds
A fund which is set up by a trade or professional organisation to pay compensation to people who have suffered loss or hardship which has been caused by the actions of members of the organisation.

Control
A person has control of a company if they hold shares or securities that can control the majority of the voting powers affecting the company as a whole.

Consideration
A legal term meaning 'something given for something done', i.e., the payment made for goods or services received. For a contract to be valid some consideration must be given.

Conacre
The name for a grazing licence in Northern Ireland

Commorientes
See simultaneous deaths

Closecompany
A company which is under the control of five or fewer participators, or of participators who are directors.

Clearancecertificate
The personal representatives can apply for a clearance certificate using form IHT30 once they have supplied the necessary forms and paid all the Inheritance Tax and interest due. Find out more about clearance certificates in the guide: 'Inheritance Tax and record keeping'.

civilpartnership
The legal relationship existing between two civil partners who have registered their partnership in accordance with the Civil Partnership Act 2004, which came into force on 5 December 2005.

civilpartner
A person who has formed a civil partnership with someone else.

Chattels
Personal property such as household and personal goods, furniture, jewellery, antiques and works of art, stamp and coin collections, cars, caravans and boats, electrical equipment, clothes, books and garden equipment.

Charityexemption
A transfer that is made to a charity or other qualifying body is exempt from inheritance tax.

Charity
For inheritance tax purposes a charity is a UK registered charity or other qualifying body. Other qualifying bodies include organisations such as St John's Ambulance, hospices and orphanages.

Charitabletrust
A trust which is held indefinitely for charitable purposes only.

Chargeablevalue
The chargeable value of an estate on death is the total of the assets less liabilities less exempt gifts and capital reliefs

Chargeabletransfer
A transfer of value made by an individual which is not an exempt transfer.

chargeasp
There are three occasions where a chargeable event arises on an ASP.

chargeableamount
On an age 18 to 25 trust the chargeable amount is the amount by which the value of the trust has decreased as a result of a disposition by the trustees.

Characterappropriate
For the purposes of agricultural relief, a farmhouse, cottage or building must be proportionate in size and nature to the requirements of the farming activities conducted on the agricultural land or pasture in question.

Cessategrant
A grant of representation which terminates at the end of a specified time span. Application for this is made on the form Cap A5C which is available from the Probate and IHT Helpline on 0845 3020900.

Businessproperty
See relevant business property

Businessrelief
Relief from Inheritance Tax which is due on a transfer of relevant business property.

business
For the purpose of business relief, business includes any business carried on in the exercise of a profession or vocation.

bookvalue
A company's value as it appears on a balance sheet, equal to total assets and intangible assets such as goodwill, minus liabilities. The value of assets as they appear on a balance sheet will be equal to the cost of the assets minus accumulated depreciation. Book value therefore often differs substantially from the open market value.

ber
A person who is aged under 18 and at least one of whose parents or step-parents has died.

Beneficialjointtenancy
See joint tenancy

Beneficiary
For inheritance tax purposes, a beneficiary is a person or organisation which receives property, or gets some benefit from, a will, intestacy or trust.

bank
A bank is defined in s840A Taxes Act 1988 as

AuthorisedUnitTrust
A unit trust scheme authorised by the Financial Services Authority. A UK unit trust must be authorised before it can be offered to the general public in the UK.

Asset
A possession which has value, such as a house, land, cash or securities.

asp
A fund (whether sums or assets) held under a money purchase arrangement that have been 'designated' to provide a scheme member (who is aged 75 or over) with an alternatively secured pension.

Appeal
The personal representatives may appeal against a notice of determination in writing within 30 days of the date of issue of the notice. The appeal will be heard either by the Special Commissioners or the Lands Tribunal.

Annuity
A series of fixed payments paid over a fixed number of years or during the lifetime of an individual, or both. An annuity is often used to provide a pension. It can also be an annual payment provided for in a will.

Annualexemption
The amount you can give away each tax year that will be exempt from Inheritance Tax. This is currently £3,000 and applies to one gift or a number of gifts up to that amount. There are other exemptions which can apply.

aim
Shares which are traded on the Alternative Investment Market.

Agriculturalvalue
The value a property would have if it could only be used as agricultural property. More on agricultural value.

Agriculturalproperty
Land or pasture used in the growing of crops or intensive rearing of animals for food consumption. Also can include farmhouses and farm cottages.

Agriculturalrelief
Relief from Inheritance Tax which is due on the transfer of agricultural property. The relief applies to the agricultural value of the asset only.

Aggregatechargeabletransfer
The total amount on which inheritance tax is charged. This is made up of the deceased's personal and real estate, any interest in possession trusts in which the deceased was treated as having a beneficial interest , gifts with reservation, the deceased's share of joint property, all chargeable transfers made by the deceased in the seven years prior...

age1
The inheritance tax charge on an age 18 to 25 trust which occurs when

age
From 22 March 2006, an 'age 18 to 25 trust' is a discretionary trust set up under the Will or intestacy of a deceased parent or step-parent, where the property is held on trust for the benefit of someone aged over 18 and under 25. Accumulation and maintenance trusts set up before 22 March 2006 which provide for beneficiaries to become absolutely en...

Administratrix
A woman who is appointed by the courts to administer a deceased person's estate in England, Wales and Northern Ireland; usually where there is no will or they are not named in the will.

Administratrices
Plural of administratrix.

Administrator
A man who is appointed by the courts to administer a deceased person's estate in England, Wales and Northern Ireland; usually where there is no will or they are not named in the will.

Accumulation
When the income of a fund is saved up and not paid out to any beneficiaries, it is said to be accumulated.

Interestinpossession
This is a term in general law. Generally, a person has an interest in possession in property held in trust if they have the immediate right to use or enjoy the property or receive any income arising from it. Up to 22 March 2006, all such trusts were treated for inheritance tax purposes as owned by the person having the interest in possession.

Interest
Interest will be charged on any unpaid inheritance tax from the day the tax is due until the date of payment, no matter what caused the delay in payment. Interest is also charged on instalments. Further information about interest can be found in the guide: 'Interest on Inheritance Tax - when and how it is charged'.

Instalmentoptionproperty
A phrase used in HMRC Inheritance Tax to describe property on which the instalment option may be chosen, such as land and buildings, business property and certain shares and securities.

Instalments
Inheritance Tax can be paid in ten annual instalments on certain assets, such as houses, business property and unlisted shares and securities. Find out more about paying Inheritance Tax in instalments.

Inheritancetaxthreshold
The inheritance tax threshold is the amount above which inheritance tax becomes payable. If the estate, including any assets held in trust and gifts made within seven years of death, is less than the threshold, no inheritance tax will be due on it. See the current threshold.

InheritanceTax
A tax on the value of a person's estate on death and on certain gifts made by an individual during their lifetime.

Incomedrawdown
A particular situation where the deceased has reached pension age but has chosen not to buy an annuity that will provide their pension. Instead, they decide to 'draw' a certain level of income from the retirement fund with a view to buying an annuity at a later date.

Immovableproperty
A person's possessions in the form interests in land and the permanent buildings on the land.

immediate
The Finance Act 2006 defined an immediate post-death interest (IPDI) as one where a person has an interest in possession in settled property and all the following apply

Immediatelychargeabletransfer
Before 22 March 2006, there was an immediate claim for inheritance tax on gifts into discretionary trusts or to companies. For gifts made on or after 22 March 2006, an immediately chargeable transfer is one made to the trustees of a relevant property trust or to a company. Additional tax may be payable if the donor dies within seven years of the gi...

ICT
Immediately chargeable transfer

IHT
Inheritance Tax

HMRevenueCustoms
See Her Majesty's Revenue & Customs.

HMRC
See Her Majesty's Revenue & Customs.

HerMajestysRevenueCustoms
The Government department created from the merger of the Inland Revenue and HM Customs & Excise.

Grossvalueoftheestate
The total of all the assets that make up the deceased's estate before any of their debts are taken off.

Grasskeep
Another name for a grazing licence.

Grazinglicence
A licence granted for a period of less than twelve months which allows the licencee to graze animals or take grass from land for a season. In this situation the owner may still be regarded as occupying the land and so agricultural relief from inheritance tax is due at the higher rate.

Grantpendentelite
An interim grant of representation which is only effective for a limited time, for example, while the validity of a will is being contested.

Grantofprobate
The proof of legal authority required by the person who is entrusted with dealing with a deceased person's estate where there is a will.

Grantoflettersofadministration
The proof of legal authority required by the person who is entrusted with dealing with a deceased person's estate where there is no will, or any will made is invalid.

Grantofrepresentation
The proof of legal authority required by the person who is entrusted with dealing with a deceased person's estate.