Plain-English definitions of UK financial, tax and property terms. Click any term for a full explanation, related calculators and further reading.
Tax-free allowance for capital gains, £3,000 per person for 2025/26.
Reduction of the £60,000 pension annual allowance for high earners, down to a £10,000 minimum.
Reduced CGT rate on qualifying business sales — 14% in 2025/26, rising to 18% from April 2026.
Old tactic of selling and rebuying the same share to reset its base cost — blocked by HMRC's 30-day rule.
Non-cash benefits from your employer that are taxable as income.
Tax on profits when you sell assets like property, shares or business interests.
HMRC online tool to check IR35 employment status — controversial accuracy.
HMRC scheme for taxing payments to construction subcontractors — 20% or 30% deduction.
Employer NI charged at 15% on most Benefits in Kind (P11D items).
Employer NI on items included in a PAYE Settlement Agreement (PSA), paid annually.
UK tax on company profits — 19% small profits rate, 25% main rate for 2025/26.
PAYE method where year-to-date pay and allowances are used each pay period to true-up tax.
Total tax paid expressed as a percentage of total gross income — your real average rate.
High Income Child Benefit Charge — a tax claw-back on Child Benefit for higher earners.
Tax clawback on Child Benefit if either parent earns over £60,000 (2024+).
His Majesty's Revenue and Customs — the UK government department responsible for tax collection.
Tax on the estate of someone who has died, above the nil-rate band threshold.
Tax rules to ensure contractors working like employees pay similar tax to employees.
HMRC's digital reporting system — quarterly updates using approved software.
Tapered Corporation Tax for company profits between £50,000 and £250,000 — effective rate rises from 19% to 25%.
The tax rate you pay on the next £1 of income — used to evaluate pay rises and pension contributions.
A way to transfer £1,260 of unused Personal Allowance to a spouse or civil partner.
Claim Marriage Allowance for up to four prior tax years — worth up to ~£1,260 in refunds.
HMRC initiative requiring digital tax record-keeping and quarterly online updates.
The £325,000 IHT-free threshold per person — no Inheritance Tax below this.
Form reporting Benefits in Kind (company car, medical insurance) to HMRC each year.
Form given when leaving a job, showing pay and tax deducted in the current tax year.
Form your employer gives you when you stop working — shows pay and tax to date.
Annual summary of pay and tax deducted from an employee, issued by 31 May each year.
End-of-tax-year certificate showing total pay and deductions — kept for 4 years.
Pay As You Earn — the system HMRC uses to collect Income Tax and NI from employees.
The amount of income you can earn each tax year before paying any income tax.
Lifetime gifts that become fully IHT-free if the donor survives seven years.
Legal authority to administer a deceased person's estate in England, Wales and NI.
Tapered IHT relief when the same assets are taxed twice within five years on successive deaths.
Extra £175,000 IHT allowance when a home passes to children or grandchildren.
PAYE system requiring employers to report pay, tax and NI to HMRC on or before each payday.
HMRC test determining UK tax residency — based on days, ties and work patterns.
A code used by HMRC to tell your employer how much tax-free income you get each year.
Tax-free £1,000 a year of gross self-employed or casual «side hustle» income.
A PAYE employer for contractors — handles tax/NI in exchange for a margin fee.
10-digit HMRC reference number for self-employed, landlords, and Self Assessment filers.
A 10-digit Unique Taxpayer Reference issued by HMRC for Self Assessment.
Simplified VAT for small businesses — pay a fixed % of gross turnover instead of accounting for input VAT.
The annual turnover above which a UK business must register for VAT (£90,000 in 2025/26).
Non-cumulative PAYE method that taxes each pay period in isolation, ignoring year-to-date totals.
Total taxable income plus all employer and personal pension contributions — used to size the taper.
Annual Equivalent Rate — standard way to compare savings account interest.
An insurance product converting a pension pot into guaranteed income for life.
Annual Percentage Rate — true cost of borrowing including fees.
Extra ISA allowance for a surviving spouse equal to the deceased's ISA value.
The legal requirement for UK employers to enrol eligible workers into a workplace pension.
Workplace pension scheme employers must enrol eligible workers into automatically.
Selling shares in a taxable account and immediately repurchasing them inside an ISA to shelter future gains and dividends.
Rule letting you use unused pension Annual Allowance from the previous three tax years.
The lump-sum value a defined benefit scheme will offer if you transfer it to a DC pension.
Tax relief for investors in qualifying small unquoted trading companies — 30% Income Tax relief plus CGT perks.
Financial Services Compensation Scheme — UK savings protection up to £85,000.
Government-bonus first-home savings ISA — closed to new accounts since 2019.
UK low-income savings scheme — 50% government bonus on up to £50/month.
Individual Savings Account — a tax-free wrapper for cash savings or investments.
An ISA for first homes or retirement with a 25% government bonus on contributions.
Cap on tax-free pension lump sums paid in life and on death — £1,073,100 from April 2024.
Max £268,275 tax-free cash you can take across all pensions in your lifetime.
Reduced £10k pension allowance after flexibly accessing a pension.
Workplace pension method where contributions come out of gross pay before income tax is calculated.
Max £60,000 you can contribute to pensions per year with tax relief.
Keeping a pension invested and withdrawing flexibly in retirement.
Pension method where contributions come from net pay and the provider claims 20% tax relief from HMRC.
CGT rule matching share sales first against same-day purchases of identical shares.
HMRC-approved tax-advantaged share scheme letting employees buy shares at a discounted price after 3 or 5 years of saving.
Aggregated holding of identical shares used for CGT cost-basis calculation under HMRC rules.
Generous tax relief for backing very early-stage startups — 50% Income Tax relief on up to £200,000/year.
Self-Invested Personal Pension — a personal pension you control.
A regular government payment in retirement based on your National Insurance record.
Reduced pension Annual Allowance for high earners — tapers down from £60,000 to a £10,000 floor.
Income measure used to test whether the £200,000 pension tapering trigger applies.
A pension withdrawal where 25% is tax-free and 75% is taxed as income, taken without entering drawdown.
Informal term for selling and repurchasing the same asset to crystallise a CGT loss — restricted in the UK.
Annual Percentage Rate of Charge — true cost of UK mortgages including fees.
Buying property to rent out — subject to extra stamp duty surcharge and income tax on rent.
UK alternative to leasehold — flat-owners collectively own building forever via association.
The legal process of transferring property ownership in England, Wales and NI.
Property classification (A-H) determining local Council Tax — based on 1991 values.
Energy Performance Certificate — required for UK property sales/lettings.
External Wall System form certifying cladding safety on flats over 11m — needed for mortgage.
Full and permanent ownership of property and the land it sits on.
Closed UK government scheme — Equity Loan ended 2023, ISA closed to new accounts 2019.
Land and Buildings Transaction Tax — Scotland's equivalent of Stamp Duty.
Property ownership for a fixed term — you own the home but not the land.
Land Transaction Tax — Wales' equivalent of Stamp Duty.
Mortgage as a percentage of property value — determines mortgage rate.
Tax-free £1,000 a year of gross UK property rental income.
NI's property tax — replaces Council Tax, made up of a regional rate and a district rate based on capital value.
Lets owner-occupiers earn up to £7,500 a year tax-free by letting a furnished room.
Statutory right of leaseholders to take over building management from freeholder.
Stamp Duty Land Tax — the property transaction tax in England and Northern Ireland.
Statutory consultation notice freeholder must serve before major works costing £250+/flat.
Rule limiting buy-to-let landlords' mortgage interest relief to a 20% basic-rate tax credit.
A scheme where you buy 25–75% of a home and pay subsidised rent on the rest.
DWP benefit for surviving spouse/partner under State Pension age — up to £9,800.
Two main pension types: DB pays a guaranteed income based on salary and service; DC builds a pot you invest and draw from.
A personal account number used to track your NI contributions and tax record.
The UK's statutory minimum hourly rate for workers aged 21 and over.
UK statutory minimum hourly pay — £12.21 for 21+ from April 2025.
Payment in Lieu of Notice — taxable redundancy/dismissal payment for notice period.
UK student loan plan for English students starting from 2023 — 40-year repayment window.
Giving up part of your salary in exchange for non-cash benefits — saves tax and NI.
UK government scheme: 20% top-up on childcare costs, max £2,000/year per child.
Employer-arranged pension under auto-enrolment — minimum 8% total contribution on qualifying earnings.
The valuation band (A to H or I) that determines how much Council Tax you pay.
The maximum default tariff energy suppliers can charge most UK households.
Maximum unit rate energy suppliers can charge default-tariff households — set quarterly.
UK government service to report a death to most government departments in one go.
Vehicle Excise Duty — UK annual road tax. £195 flat from year 2 for most cars.