Plain-English definitions of UK financial, tax and property terms. Click any term for a full explanation, related calculators and further reading.
The effective 60% marginal tax rate on income between £100,000 and £125,140 caused by the Personal Allowance taper.
A notice requiring someone under HMRC enquiry into a suspected tax avoidance scheme to pay the disputed tax upfront, before the dispute is resolved.
A historic type of UK trust set up for children or young beneficiaries, where income could be accumulated until they reached a set age.
Your total taxable income less grossed-up pension and Gift Aid contributions — used to test the Personal Allowance taper and HICBC.
HMRC-set per-mile fuel reimbursement rates for company car users, updated quarterly, used to reimburse employees for business mileage or for employees to repay private fuel costs.
Tax-free allowance for capital gains, £3,000 per person for 2026/27.
A GBP 3.35 per tonne levy on the commercial exploitation of rock, sand or gravel quarried in the UK, introduced in 2002 to promote recycled aggregates.
An Inheritance Tax relief reducing the agricultural value of qualifying farmland and farm buildings by 50% or 100%.
An IHT relief providing up to 100% exemption on the agricultural value of qualifying farmland and agricultural property, subject to a GBP 1 million combined cap from April 2026.
An Inheritance Tax relief reducing the taxable value of qualifying agricultural land and property used for farming, by 100% or 50%, now subject to a combined 1 million pound cap alongside Business Relief from April 2026.
An excise duty charged on passengers departing from UK airports, with rates varying by destination band and class of travel.
Multiple classes of ordinary shares (A, B, C etc.) in a company that allow the directors to declare different dividend amounts per class, often used in family companies for flexible income splitting.
A HMRC scheme letting eligible businesses file one VAT return per year and make advance payments on account, reducing administrative burden.
Reduction of the £60,000 pension annual allowance for high earners, down to a £10,000 minimum.
The amount of net capital gains an individual can realise in a tax year without paying Capital Gains Tax, set at £3,000 for 2026/27.
A deal between two unconnected parties, each acting independently and in their own interest, agreed on open-market terms -- the opposite of a transaction between connected persons, which HMRC can re-price at market value for tax purposes.
Reduced CGT rate on qualifying business sales — 18% for 2026/27 (rose from 14% on 6 April 2026; was 10% before April 2025).
An amount added back to taxable profits when a business sells an asset for more than its remaining capital allowances value.
A taxable amount that arises when an asset held in a capital allowances pool is sold for more than its remaining tax written-down value, creating a negative pool balance that is added back to taxable profits in that accounting period.
The final Self Assessment payment due on 31 January settling any outstanding tax after payments on account and PAYE deductions.
The £37,700 band of taxable income (above the Personal Allowance) taxed at the 20% basic rate in England, Wales and Northern Ireland for 2026/27.
Old tactic of selling and rebuying the same share to reset its base cost — blocked by HMRC's 30-day rule.
A loan from an employer to an employee at below-market interest rate. If the total loan exceeds £10,000, the difference between the official rate and what you pay is a taxable benefit-in-kind.
The right to enjoy the economic benefit of an asset, even if the legal title is held by someone else. In tax, income and gains are taxed on the beneficial owner, not the legal owner.
A UK trust for a child under 18 who has lost a parent, given favourable inheritance tax treatment provided the child takes the property at age 18.
Non-cash benefits from your employer that are taxable as income.
An extra income tax allowance added to the personal allowance for people who are registered blind or severely sight impaired.
A CGT relief reducing the rate on qualifying business disposals to 14% (from April 2025), subject to a £1 million lifetime limit.
A capital gains tax relief that defers the gain on selling a business asset when the proceeds are reinvested in a new qualifying business asset.
An Inheritance Tax relief that reduces the taxable value of qualifying business assets by 50% or 100%.
An IHT relief providing up to 100% exemption on qualifying business assets, including shares in unquoted companies and sole trader business assets, subject to a GBP 1 million combined cap with APR from April 2026.
An Inheritance Tax relief reducing the taxable value of qualifying business assets, including most trading company shares and unquoted business interests, by 100% or 50%, provided the assets were owned for at least two years before death.
Tax relief that lets businesses deduct the cost of qualifying equipment and plant from their profits.
Tax on profits when you sell assets like property, shares or business interests.
Tax on the profit when you sell or dispose of an asset that has risen in value.
The taxable benefit that arises when an employer provides free fuel for private use of a company car.
A fund manager's share of investment profits treated as a capital gain, historically taxed at 28% CGT.
HMRC online tool to check IR35 employment status — controversial accuracy.
The taxable profit on disposal of an asset after deducting costs and the Annual Exempt Amount.
A lifetime gift, usually into a discretionary trust, that is immediately chargeable to inheritance tax above the available nil-rate band.
A physical moveable asset. Chattels sold for £6,000 or less are exempt from Capital Gains Tax. Between £6,000 and £15,000, CGT is limited to 5/3 of the excess over £6,000.
A Capital Gains Tax exemption for gains on most personal possessions disposed of for GBP 6,000 or less.
A universal payment from HMRC to people responsible for raising a child, paid at £27.05 a week for the eldest child and £17.90 a week for each additional child in 2026/27.
HMRC scheme for taxing payments to construction subcontractors — 20% or 30% deduction.
The online process a contractor must complete before making the first payment to a new subcontractor under the Construction Industry Scheme, determining the correct deduction rate.
Employer NI charged at 15% on most Benefits in Kind (P11D items).
Employer-only NI at 13.8% on benefits in kind such as company cars and private medical insurance, reported on P11D(b) and due by 19 July.
Employer NI on items included in a PAYE Settlement Agreement (PSA), paid annually.
The former flat-rate weekly National Insurance contribution paid by self-employed people with profits above a threshold, abolished as a mandatory charge from April 2024 while still counting towards state benefit entitlement.
Voluntary National Insurance contributions people can pay to fill gaps in their NI record and qualify for, or increase, the State Pension.
HMRC's civil investigation procedure for cases involving suspected serious tax fraud, offering taxpayers a Contractual Disclosure Facility in exchange for full cooperation and complete disclosure.
A formal legal document that amends an existing will without having to rewrite the whole thing.
An HMRC document (form P2) that explains how your PAYE tax code was worked out and what allowances and deductions it includes.
A taxable benefit arising when an employee has private use of a company van, charged at a flat rate of £3,960 for 2026/27 rather than as a percentage of list price as applies to cars.
An Inheritance Tax and Capital Gains Tax exemption for outstanding heritage assets -- such as historic land, buildings, art or archives -- in exchange for public access and preservation undertakings.
Two or more companies are connected for Corporation Tax purposes if they are under common control (e.g. same owner). Connected companies share the Corporation Tax thresholds, meaning each company's profit limits are divided by the number of associated companies.
For UK tax purposes, a connected person is a relative (spouse, civil partner, parent, sibling, child, grandchild), their spouse, or a company you control. Transactions between connected persons are treated as occurring at market value.
HMRC definition of parties treated as connected for anti-avoidance rules, including spouses, relatives, and controlled companies.
The Income Tax, National Insurance and sometimes VAT that YouTubers, streamers, influencers and podcasters owe on earnings from ads, sponsorships, gifted items and platform payouts.
Frequent buying and selling of cryptoassets is usually taxed as Capital Gains Tax for individuals, but very high-frequency, business-like trading risks being reclassified as Income Tax trading.
The HMRC method of grouping identical cryptoassets into a single pool to calculate the average cost when working out Capital Gains Tax.
A Capital Gains Tax-triggering event that occurs when you sell, exchange, gift, or otherwise dispose of cryptocurrency or other crypto tokens.
PAYE method where year-to-date pay and allowances are used each pay period to true-up tax.
EU/UK directive requiring digital platforms to report sellers' income to tax authorities annually.
EU and UK rules requiring digital platform operators (Airbnb, Vinted, Etsy, eBay) to report seller income data to HMRC from 2024.
Whether HMRC treats your share, forex or CFD trading as taxable trading income (Income Tax) or as capital gains (Capital Gains Tax) — usually the latter for individuals.
A threshold below which EU-derived state aid rules permit governments to offer companies assistance without notifying the European Commission. The threshold is EUR 300,000 over three years per undertaking. The Employment Allowance is subject to de minimis state aid rules.
A formal legal document recording that someone has given an asset -- such as money, property or valuables -- to another person as an outright gift, with no payment made in return.
A legal document that lets beneficiaries redirect part or all of an inheritance to others, with the change treated as if made by the deceased for tax purposes.
A legal document letting a beneficiary redirect their inheritance to someone else, treated for tax as if the deceased had made the gift.
A legal document allowing beneficiaries to redirect their inheritance to someone else within two years of death, treated for Inheritance Tax and Capital Gains Tax purposes as if the deceased had left it that way in their will.
The rule treating long-term UK residents as UK-domiciled for tax purposes -- abolished for Income Tax and CGT from April 2025, partly retained for IHT.
The amount treated as employment income when an engagement falls inside the IR35 or off-payroll rules.
Locking cryptoassets in a decentralised finance protocol to help run a blockchain network in return for token rewards.
Tax relief that lets employees claim travel and subsistence costs of working at a temporary workplace, free of Income Tax and NI.
Whether someone working remotely while travelling or living abroad counts as UK tax resident is decided by the Statutory Residence Test's day-counting and connecting-factor rules, not by their job type.
A requirement from January 2024 for digital platforms to report UK sellers' income annually to HMRC, enabling the tax authority to cross-check whether sellers are correctly declaring income from online sales and services.
A 2% levy on UK revenues of large social media platforms, search engines and online marketplaces, introduced on 1 April 2020.
A non-cash benefit provided by a limited company to its director that HMRC treats as taxable employment income, reported on form P11D or through payrolling, including company cars, private medical insurance and interest-free loans above GBP 10,000.
A trust set up to benefit a disabled or vulnerable person, qualifying for special, more favourable Inheritance Tax and other tax treatment.
An HMRC assessment raised outside the normal enquiry window when HMRC discovers previously undeclared income or gains, with time limits of 4, 6, or 20 years.
A trust where trustees have discretion over how and when income and capital are paid to a defined class of potential beneficiaries.
The 45% income tax rate applied to income accumulated within a discretionary trust that exceeds the trust's £1,000 standard-rate band.
The distinct tax regime applying to discretionary trusts, where trustees have discretion over which beneficiaries receive income or capital, subject to Income Tax at the trust rate, Capital Gains Tax at trust rates, and periodic and exit Inheritance Tax charges.
Arrangements -- such as EBT loans -- used to pay employees or contractors in ways that avoided Income Tax and NI, now subject to the 2019 loan charge.
The amount of dividend income you can receive tax-free each year — £500 in 2026/27.
The tax charged on dividend income above the £500 tax-free allowance, at rates of 10.75%, 35.75% or 39.35% depending on your overall income band for 2026/27.
A formal document that a company must produce when paying a dividend. It records the payment date, amount paid per share, shareholder name and total dividend amount. HMRC requires dividend vouchers as evidence of dividend payments.
A formal legal document by which a shareholder gives up their right to receive a declared dividend, often used in family companies to direct income to lower-rate taxpaying spouses.
A VAT anti-fraud measure for construction services where the customer (main contractor) accounts for VAT rather than the supplier (subcontractor), effective from March 2021.
A legal concept determining your long-term ties to a country, which affects UK inheritance tax liability regardless of where you currently live or pay income tax.
The domicile a person acquires at birth, normally that of their father, which remains until a new domicile of choice is established.
A treaty between two countries that prevents the same income or gains being taxed twice and sets out which country has taxing rights.
Since 6 April 2025, most double-cab pickup trucks provided to employees for private use are taxed as company cars, based on CO2 emissions and list price, rather than at the flat rate that applies to vans.
A mechanism allowing the Residence Nil Rate Band to still be claimed on an estate where the deceased sold, gave away, or downsized from their home before death, provided assets of equivalent value pass to direct descendants.
Total tax paid expressed as a percentage of total gross income — your real average rate.
A temporary tax code used when HMRC lacks full information, often taxing you on a non-cumulative basis.
A discretionary trust used by employers to reward or retain employees, now tightly regulated by HMRC's disguised remuneration rules under Part 7A ITEPA 2003.
A now-abolished employment status where employees exchanged certain employment rights for shares; removed from 2016.
An HMRC-approved share options scheme for small companies allowing options up to £250,000 per employee. Offers significant income tax, NI, and CGT advantages.
The former name of Business Asset Disposal Relief before it was renamed and reformed in the March 2020 Budget.
The full process of dealing with a deceased person's affairs -- valuing assets, paying debts and tax, and distributing what remains -- of which obtaining probate is just one step.
Income from selling on Etsy counts as trading income for UK tax purposes once it goes beyond occasional hobby sales, and must be declared to HMRC above the £1,000 Trading Allowance.
An estate that does not require a full Inheritance Tax account to be submitted, usually because no IHT is due and conditions are met.
Income an offshore reporting fund earns but does not distribute to investors -- still taxable as if it had been paid out, even though no cash is received.
A trust holding non-UK assets established by a non-UK domiciled individual, typically to shelter those assets from UK inheritance tax.
An Inheritance Tax charge that can arise when capital leaves a relevant property trust, calculated on the period since the last ten-year anniversary or the trust's creation.
A capital allowance that lets a business deduct the full cost of certain qualifying assets in the year they are bought.
The effect of freezing tax thresholds so that rising wages pull more people into higher tax bands over time.
An Inheritance Tax planning trust structure under which pre-set future payments (reversions) to the settlor can be cancelled or deferred if not needed, offering more flexibility than a fixed-term arrangement while still removing gifted capital from the settlor's estate over time.
The new UK tax regime from April 2025 replacing the remittance basis, giving new UK residents a 4-year exemption on foreign income and gains.
The replacement for the abolished remittance basis (from April 2025): new UK tax residents who have not been UK resident in the previous 10 years pay no UK tax on foreign income or gains for their first 4 years of residence.
A UK tax relief that lets you offset tax already paid abroad against the UK tax due on the same foreign income or gains.
UK tax on foreign exchange trading profits, which is usually Capital Gains Tax for individual investors but can be Income Tax if HMRC views the activity as a trade.
The HMRC form used by married couples or civil partners to declare that rental income from jointly-owned property is split in proportions other than the default 50/50.
The Real Time Information report an employer sends to HMRC on or before each payday, showing pay, tax and National Insurance for every employee.
A UK tax rule that lets HMRC counteract the tax advantage from arrangements that are technically legal but go well beyond any reasonable interpretation of what the law intended.
A scheme allowing charities to reclaim basic-rate tax on donations from UK taxpayers, boosting each £1 donated to £1.25.
An election allowing a Gift Aid donation made after the end of a tax year, but before the Self Assessment filing deadline, to be treated as if made in the previous tax year, typically to obtain higher-rate tax relief sooner or use up available relief.
A scheme letting charities claim a Gift Aid-style top-up on small cash and contactless donations without collecting individual Gift Aid declarations.
A capital gains tax relief that lets you defer the gain on a qualifying gift by passing it to the recipient, who inherits a reduced base cost.
A decreasing term life insurance policy designed to cover the potential Inheritance Tax on a gift if the giver dies within seven years.
An inheritance tax exemption for regular gifts made from your after-tax income that do not reduce your normal standard of living.
A gift where the donor keeps a benefit from the asset, so it remains in their estate for Inheritance Tax despite being given away.
A gift where the donor keeps some benefit from the asset, so it stays in their estate for inheritance tax despite being given away.
The process of working back from a net (after-tax) amount to the gross (pre-tax) amount needed to leave the recipient with that net sum.
A calculation that works out the pre-tax value of a tax-free legacy when the estate, rather than the beneficiary, bears the Inheritance Tax on it.
A class of company shares issued to employees above the current market value, so that the employee only benefits from future growth and pays capital gains tax rather than income tax on any gain.
High Income Child Benefit Charge — a tax claw-back on Child Benefit for higher earners.
His Majesty's Revenue and Customs — the UK government department responsible for tax collection.
HMRC's data analytics platform that cross-references income and lifestyle data from multiple sources to identify tax non-compliance.
A letter sent by HMRC to taxpayers identified by its Connect data-matching system as potentially having undeclared income or errors in their tax returns.
A compliance check letter from HMRC suggesting you may have underpaid tax or not declared income, prompting you to review and correct your affairs.
A free online service provided by HMRC at gov.uk/personal-tax-account that allows UK individuals to view and manage their personal tax affairs, including tax codes, National Insurance records, and Self Assessment.
A system where HMRC calculates a taxpayer's income tax liability using data it already holds -- from employment, pensions and bank interest -- and issues a PA302 tax calculation instead of requiring the individual to file a Self Assessment return.
A reduction in inheritance tax on gifts made 3-7 years before death, reducing the IHT rate from 40% on a sliding scale.
The main HMRC account form used to report an estate for Inheritance Tax when it does not qualify as an "excepted estate".
A type of life interest in a will trust that takes effect immediately on death and is treated for tax as belonging to the life tenant.
Non-cash benefits provided by an employer that are taxed as if they were cash salary.
The tax you pay on most income above your Personal Allowance, charged in bands at rising rates.
A capital gains tax relief that defers the gain when an unincorporated business is transferred to a company in exchange for shares.
Tax on the estate of someone who has died, above the nil-rate band threshold.
A 40% tax on the part of an estate above the nil-rate band (£325,000) when someone dies, reduced to 36% if 10% or more of the estate is left to charity.
A legal document letting beneficiaries redirect part of an inheritance within two years of death, often for tax planning.
A tax on general insurance premiums charged in the UK. Standard rate is 12%; higher rate of 20% applies to travel insurance and certain other policies.
A reduced 14% Capital Gains Tax rate for outside investors in unlisted trading companies, with a £1m lifetime cap.
A tax code where deductions exceed your Personal Allowance, adding extra taxable income rather than reducing it -- the opposite of a standard allowance code.
A tax on waste disposed of at licensed landfill sites. The 2026/27 standard rate is GBP 126.15 per tonne; lower rate GBP 4.05 per tonne for inactive waste.
An automatic £100 penalty for missing the 31 January deadline, rising with daily charges and percentage penalties up to 12 months late.
An HMRC voluntary disclosure route for residential landlords who have not declared all of their rental income, offering better terms than waiting to be investigated.
A one-off tax charge on outstanding loans made through disguised remuneration schemes, such as employee benefit trusts, that were never repaid and were used in place of taxed salary.
An Inheritance Tax planning structure where a settlor lends, rather than gifts, money to a trust, allowing future investment growth to fall outside their estate while retaining the right to call back the original loan capital.
HMRC programme requiring businesses to keep digital records and submit tax returns using compatible software instead of paper or manual methods.
A mandatory HMRC digital reporting regime requiring quarterly income/expense summaries from self-employed individuals and landlords, phased from April 2026.
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.
An Income Tax allowance available to married couples or civil partners where at least one partner was born before 6 April 1935, reducing the couple's combined tax bill rather than their taxable income directly.
Tax relief an employee can claim when their employer pays less than the approved mileage rates for business travel in their own vehicle.
The position of an individual who is both employed and self-employed in the same tax year, requiring separate calculation and payment of Class 1 National Insurance on earnings and Class 4 on profits, sometimes with an annual maximum charge.
Single-letter codes that appear on payslips indicating which National Insurance contribution rate applies to an employee, based on their employment status and circumstances.
Credits automatically or voluntarily added to a National Insurance record in place of paid contributions, protecting entitlement to the State Pension and certain benefits during periods of low or no earnings.
A claim that lets you treat an asset that has become almost worthless as sold and reacquired, crystallising a capital loss without an actual sale.
Ongoing royalty payments earned by NFT creators each time their NFT is resold are generally taxable UK income, on top of Capital Gains Tax due on the original sale of the NFT itself.
How UK tax applies to buying, selling and creating non-fungible tokens, usually through Capital Gains Tax or Income Tax depending on the activity.
The £325,000 IHT-free threshold per person — no Inheritance Tax below this.
Historically, a UK resident whose permanent home (domicile) was treated as overseas, affecting how foreign income and gains were taxed.
An Inheritance Tax exemption for regular gifts made from surplus income that do not reduce the giver standard of living.
A letter or online notice from HMRC explaining how your PAYE tax code has been worked out for the year.
Post-2017 rules restricting tax advantages where employees can choose between a benefit or cash.
A UK tax relief letting eligible new arrivals exclude earnings for duties performed abroad from UK Income Tax, subject to specific conditions.
Form reporting Benefits in Kind (company car, medical insurance) to HMRC each year.
The employer return that declares the total Class 1A National Insurance due on taxable benefits provided to employees.
Form given when leaving a job, showing pay and tax deducted in the current tax year.
Annual summary of pay and tax deducted from an employee, issued by 31 May each year.
A letter or online notice HMRC sends to PAYE taxpayers at the end of the tax year showing whether they have paid too much or too little Income Tax.
An HMRC form you complete when leaving the UK to live or work abroad, used to claim any tax refund and confirm your residence status.
The HMRC form employees use to claim tax relief on work expenses not reimbursed by their employer.
VAT rules applying to businesses making both taxable and exempt supplies -- only input VAT attributable to taxable supplies is reclaimable; exempt-supply input VAT is blocked.
Pay As You Earn — the system HMRC uses to collect Income Tax and NI from employees.
Advance tax instalments paid in January and July toward your next Self Assessment bill, each equal to 50% of the prior year's tax liability.
Advance payments toward next year's Self Assessment tax bill, each equal to half of the previous year's liability, due by 31 January and 31 July, required unless that liability was small or mostly collected through PAYE.
Advance Self Assessment payments — two instalments due 31 January and 31 July, each 50% of the previous year's tax bill.
The amount of income you can earn each tax year before paying any income tax.
The reduction of the £12,570 Personal Allowance by £1 for every £2 of adjusted net income above £100,000, creating an effective 60% marginal tax rate between £100,000 and £125,140.
Lifetime gifts that become fully IHT-free if the donor survives seven years.
A trust set up with a small nominal sum, often before other larger trusts or a death, historically used to multiply the number of nil-rate bands available for periodic Inheritance Tax charges, now largely neutralised by anti-avoidance rules.
A tax of GBP 217.85 per tonne (2026/27) on plastic packaging containing less than 30% recycled plastic, paid by UK manufacturers and importers.
Someone who earns income through a digital app or platform, such as ride-hailing, delivery or freelance marketplaces, often as a self-employed worker.
HMRC's penalty regime for late VAT and Making Tax Digital for Income Tax submissions, where a taxpayer accrues a point for each missed deadline and only faces a fixed £200 financial penalty once a points threshold is reached.
A statutory formula used to work out how much of a termination payment represents pay in lieu of unworked notice, which is always fully taxable as earnings even where the rest of the termination payment qualifies for the £30,000 tax exemption.
A lifetime gift to another individual that becomes fully exempt from Inheritance Tax if the giver survives seven years after making it.
An annual income tax charge on the benefit of using an asset you previously owned or funded but gave away, designed to counter inheritance tax avoidance.
POAT is an annual income tax charge on the benefit of continuing to enjoy an asset you have given away to dodge inheritance tax.
Legal authority to administer a deceased person's estate in England, Wales and NI.
The court fee payable to apply for a Grant of Probate or Letters of Administration in England and Wales, currently a flat £300 for estates over £5,000, separate from any Inheritance Tax due or solicitor's charges for handling the estate.
The value placed on each asset in a deceased person's estate as at the date of death, used to work out Inheritance Tax due and to obtain the grant of probate needed to administer the estate.
A tax exemption for foster carers and shared lives providers, covering a fixed weekly amount plus a per-person payment.
Interest on a loan used to invest in a close company or partnership, deductible from total income at the marginal tax rate -- unlike buy-to-let mortgage interest.
One of four mandatory digital submissions per year of income and expenditure totals that self-employed individuals and landlords must make under Making Tax Digital for Income Tax Self Assessment.
An Inheritance Tax relief that reduces the tax due when the same assets pass through two estates within five years, avoiding double taxation.
Tapered IHT relief when the same assets are taxed twice within five years on successive deaths.
A defence against HMRC penalties where a genuine, unforeseeable event prevented timely compliance.
A trust (most discretionary and many lifetime trusts) subject to the inheritance tax regime of entry, ten-year periodic and exit charges.
The Inheritance Tax regime applying to most discretionary trusts, charging up to 6% of trust assets above the nil-rate band every ten years (the periodic charge) and a proportionate exit charge when capital leaves the trust between those anniversaries.
The pre-April 2025 UK tax regime for non-domiciled residents, taxing only UK income and foreign income brought into the UK.
Non-domiciled UK residents using the remittance basis paid an annual charge of GBP 30,000 (resident 7 of 9 years) or GBP 60,000 (resident 12 of 14 years). The non-dom regime was abolished from April 2025 and replaced by the 4-year FIG regime for new arrivals.
Extra £175,000 IHT allowance when a home passes to children or grandchildren.
The reduction of the £175,000 residence nil-rate band by £1 for every £2 an estate exceeds £2 million, removing it entirely above £2.35 million.
PAYE system requiring employers to report pay, tax and NI to HMRC on or before each payday.
The HMRC document showing your Self Assessment tax calculation — how much you owe and why.
An HMRC document summarising the income and tax calculated on a Self Assessment return, widely used as proof of earnings for mortgages.
An official HMRC document summarising the Income Tax calculated from a Self Assessment tax return, commonly requested by mortgage lenders as proof of income for the self-employed.
The Scottish Advanced Rate is a 45% income tax band applied to non-savings, non-dividend income between £62,430 and £125,140 for Scottish taxpayers in 2026/27.
The 20% Scottish income tax band applying to non-savings, non-dividend income between £3,967 and £16,956 above the Personal Allowance for 2026/27.
The income tax bands and rates set by the Scottish Parliament that apply to non-savings, non-dividend income of Scottish taxpayers.
The Scottish Intermediate Rate is a 21% income tax band applied to non-savings, non-dividend income by Scottish taxpayers between the basic and higher rate bands.
The lowest Scottish income tax band, charging 19% on the first £3,967 of non-savings, non-dividend income above the Personal Allowance for 2026/27.
The Scottish Top Rate is a 48% income tax band applied to non-savings, non-dividend income above £125,140 for Scottish taxpayers in 2026/27.
The HMRC share identification method that aggregates all shares of the same class held outside an ISA into a single pool valued at average cost, used to calculate the base cost for CGT when shares are disposed of.
A Capital Gains Tax pooling rule that groups identical shares of the same class into a single pool with one average cost.
The HMRC system used to report income and calculate tax owed for people whose tax is not collected automatically through PAYE, such as the self-employed, landlords and higher earners.
A legally binding agreement, usually ending employment, that waives an employee's claims against their employer in exchange for a payment; tax treatment splits between fully taxable earnings (notice, PENP, unpaid bonus) and any element qualifying for the £30,000 exemption.
The person who creates a trust and transfers assets into it, setting the terms under which a trustee must manage those assets for the benefit of the beneficiaries.
A trust in which the settlor, their spouse or civil partner can benefit, causing the trust's income (and often gains) to be taxed on the settlor.
The popular name for the rule that lifetime gifts fall entirely outside your estate for Inheritance Tax purposes once you survive 7 years after making them.
A relief letting an investor set a loss on qualifying unlisted trading company shares (including EIS and SEIS shares) against Income Tax, instead of only against Capital Gains.
The £1,000-a-year Trading Allowance, below which gig-economy and side-hustle income (reselling, freelancing, content creation, casual services) does not need to be declared to HMRC.
An HMRC process that calculates tax owed automatically and sends a bill, removing the need to file a full Self Assessment return.
An Inheritance Tax rule letting you give up to GBP 250 per person each tax year to any number of people, free of IHT.
A UK excise duty paid by soft drinks manufacturers and importers, charged per litre according to a drink's added sugar content, intended to encourage reformulation to lower-sugar recipes.
A tax treatment available to people who move to or from the UK mid-year, splitting the tax year into a UK part (resident) and overseas part (non-resident) so foreign income in the non-UK part is not taxable in the UK.
Financial spread betting profits are exempt from both Capital Gains Tax and Income Tax in the UK, because spread bets are legally classed as gambling rather than investing.
A 0% band of up to £5,000 on savings interest, available to people with low non-savings income.
The fixed sum -- £322,000 as of 2026/27 -- that a surviving spouse or civil partner receives first under the intestacy rules if the deceased also leaves children.
HMRC test determining UK tax residency — based on days, ties and work patterns.
The three-stage legal framework (from April 2013) determining whether an individual is UK tax resident in a given tax year, based on days in the UK and personal ties.
The third stage of the Statutory Residence Test: residence is determined by counting UK ties (family, accommodation, work, 90-day, country) against the number of UK days.
A sliding reduction in the Inheritance Tax due on gifts made between three and seven years before death.
A relief that reduces the Inheritance Tax due on gifts made between three and seven years before death on a sliding scale.
A code used by HMRC to tell your employer how much tax-free income you get each year.
The difference between the total tax theoretically owed and the amount actually collected by HMRC in a given year.
HMRC's estimate of the difference between tax theoretically owed and tax actually collected; £39.8bn in 2022/23.
Commercial insurance that covers professional fees incurred when HMRC opens an enquiry or investigation, protecting businesses and individuals from unexpected adviser costs.
A refund of Income Tax that HMRC returns when someone has paid more tax than they actually owed, often due to an incorrect tax code, a mid-year job change, or unclaimed reliefs.
The 12-month period, running from 6 April to 5 April the following year, used by HMRC to assess Income Tax, Capital Gains Tax and most personal tax allowances in the UK.
A transitional relief (2025/26 to 2027/28) allowing former non-doms to remit pre-April-2025 foreign income and gains at reduced rates of 12% or 15%, rather than full UK tax.
The tax-free allowance applying to genuine compensation for loss of employment within a termination payment, covering the first £30,000 of qualifying amounts, with any excess taxed as income (though never subject to employee National Insurance).
An HMRC arrangement letting you clear a tax debt in monthly instalments instead of one lump sum.
A formal instalment plan agreed with HMRC to pay overdue or upcoming tax in structured monthly payments, with interest charged at 7.25% per annum.
A relief that can reduce the Income Tax due on a chargeable event gain from a life insurance bond by spreading the gain over the years the policy was held.
A tax relief that reduces the higher-rate charge on a chargeable event gain from a life insurance bond by spreading the gain over the years it was held.
Rules requiring transactions between connected companies in different tax jurisdictions to be priced on arm's length terms, following OECD guidelines.
A rule allowing a surviving spouse or civil partner's estate to claim any percentage of the Inheritance Tax nil rate band unused on the first death, potentially doubling their own nil rate band to up to £650,000.
A rule letting a deceased person's unused inheritance tax nil-rate band transfer to their surviving spouse or civil partner, potentially doubling it.
A rule that lets employers give small perks costing 50 pounds or less, free of tax and National Insurance, provided strict conditions are met.
HMRC's online register for trusts, required since 2022 for most UK express trusts under the 5th Money Laundering Directive.
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.
The taxable benefit that arises when an employee has private use of a company van.
A fixed taxable benefit imposed when an employer provides fuel for an employee's private use of a company van, set at £757 for 2025/26.
A mechanism that allows VAT-registered businesses to reclaim output VAT already paid on invoices that have remained unpaid by the customer for more than six months.
The timeline over which an employee progressively earns entitlement to share options, restricted shares or other equity awards, typically over three to four years with an initial cliff period.
Proactively telling HMRC about undeclared tax liabilities before it investigates, resulting in substantially lower penalties than if HMRC discovers the error itself.
Optional Class 2 or Class 3 payments made to fill gaps in a National Insurance record, protecting or increasing entitlement to the State Pension and certain benefits where a qualifying year would otherwise be missed.
An asset with a predictable useful life of 50 years or less, gains on which are often exempt from capital gains tax.
An Inheritance Tax exemption allowing gifts made in consideration of a marriage or civil partnership to be immediately outside the estate, up to £5,000 from a parent, £2,500 from a grandparent, or £1,000 from anyone else.
Non-cumulative PAYE method that taxes each pay period in isolation, ignoring year-to-date totals.
The Welsh Rates of Income Tax let the Senedd set the rate added to a reduced UK rate on non-savings income for Welsh taxpayers.
A trust created by the terms of a will, taking effect on death, commonly used to control how and when beneficiaries receive an inheritance.
Tax deducted at source before you receive income from overseas investments. UK investors can often reclaim excess withholding tax via a double taxation agreement.
A fallback Inheritance Tax relief that defers tax on the value of standing timber (not the underlying land) until the timber is eventually sold, where 100% Business or Agricultural Relief does not apply.
HMRC's online channel for UK taxpayers to declare previously undisclosed offshore income, assets or gains, introduced in 2016 following international automatic exchange of financial information.
A capital allowance that lets a business deduct a percentage of the value of plant and machinery from profits each year.
The benefit-in-kind appropriate percentage applied to electric company cars for calculating the income tax charge on the employee.
A surcharge added to Scotland's Land and Buildings Transaction Tax when you buy an additional residential property, such as a second home or buy-to-let.
A Scottish surcharge added to Land and Buildings Transaction Tax when you buy an additional residential property, charged at 8% of the full purchase price.
A legal doctrine, sometimes called "squatter's rights," that can let a person who has occupied land without the owner's permission for a sufficient period apply to be registered as the new legal owner.
An indication from a lender of how much it might lend you, based on a preliminary check before a full mortgage application.
An annual charge on UK residential property worth over £500,000 owned by companies or other non-natural persons. 2026/27 bands range from £4,400 to £269,450.
An annual charge on UK residential properties worth over GBP 500,000 owned by companies or certain partnerships.
Annual Percentage Rate of Charge — true cost of UK mortgages including fees.
A planning order by a local authority that removes specified permitted development rights, requiring owners to apply for full planning permission instead.
The default and most common form of residential tenancy in England and Wales, giving a tenant a fixed or periodic right to occupy while allowing the landlord to regain possession using the Section 21 or Section 8 procedures.
Legal requirement, named after Awaab Ishak, forcing social (and increasingly private) landlords in England to investigate and fix dangerous hazards like damp and mould within strict fixed timescales.
The right to benefit from an asset (such as rental income or sale proceeds) even if legal title is held by someone else.
A form of co-owning property where owners hold the whole asset together with no distinct shares, and a deceased owner's interest passes automatically to the survivors.
A disagreement between neighbouring property owners over the exact line that separates their land or who owns a fence, wall or hedge.
A short-term secured loan used to bridge a funding gap in property transactions, typically when buying before selling.
A new charge on most new residential developments in England, paid by developers to help fund the remediation of unsafe cladding and other fire-safety defects on existing buildings.
The most detailed type of residential property inspection, examining a building's structure and condition before purchase.
Insurance covering the physical structure of a property, including walls, roof and fixtures, against damage from events such as fire, flood, storm or subsidence; usually a mortgage condition for homeowners.
Buying property to rent out — subject to extra stamp duty surcharge and income tax on rent.
A mortgage for purchasing a property to rent out rather than live in, typically assessed on rental income coverage rather than the landlord's personal salary alone.
An additional fee charged by a property auction house directly to the buyer, typically 3-5% of the hammer price plus VAT, payable on top of the hammer price when purchasing at auction.
The standard type of mortgage where each monthly payment covers both interest and a portion of the capital borrowed, so the loan is guaranteed to be fully repaid by the end of the agreed term.
A mortgage where the interest rate can move but cannot rise above a set ceiling for an agreed period, while still able to fall.
A property being sold by someone who is not simultaneously buying another home to move into, such as a new-build, an empty inherited property, or a rental investment, reducing the risk of the sale collapsing.
A historic obligation that can require some property owners to contribute to the cost of repairing the chancel of a parish church.
A court order that secures an unsecured debt against your property. The debt must be repaid when you sell or remortgage.
A conveyancing search revealing historical or current coal mining activity beneath or near a property, including risks of subsidence, mine entries and past compensation claims.
A separate legal agreement, running alongside a main construction contract, giving a third party such as a funder, purchaser or tenant a direct right to sue a contractor or consultant for defective work.
The statutory right for qualifying leaseholders in a block of flats to club together and force the freeholder to sell them the freehold, giving the group collective control over the building and its management going forward.
A mortgage secured against a non-residential property, such as an office, shop, warehouse or factory, used to buy or refinance premises for a business or as a commercial investment.
UK alternative to leasehold — flat-owners collectively own building forever via association.
A charge that local authorities in England and Wales can levy on new development to help fund supporting infrastructure.
The date on which the remaining balance of a property's purchase price is transferred, legal ownership passes to the buyer, and the buyer collects the keys to move in.
A property purchase where the seller sells to the buyer below full market value, most often a family member selling to a relative, with the discount treated by lenders as the buyer's deposit.
A percentage of each payment under a construction contract, typically 3-5%, withheld by the client until the works are satisfactorily completed and any defects during the defects liability period are fixed.
Insurance covering the belongings inside a home, such as furniture, electronics and personal items, against loss or damage from events like fire, flood or theft.
The legal process of transferring property ownership in England, Wales and NI.
The formal process for challenging the council tax band assigned to your property if you believe it is incorrect, potentially securing a lower band and backdated savings.
A scheme that re-bands a property one Council Tax band lower where it has been adapted for a resident with a disability, such as an extra bathroom, room or wheelchair space.
An additional council tax charge English local authorities can apply to long-term empty (unoccupied and unfurnished) properties: up to 100% after 1 year, 200% after 5 years, and 300% after 10 years.
An additional council tax charge English local authorities can impose on long-term empty (unoccupied and unfurnished) residential properties: up to 100% premium after 1 year empty, 200% after 5 years, and 300% after 10 years.
A means-tested discount on your council tax bill for people on low incomes or benefits.
A Council Tax reduction of up to 25% for the liable person where another adult living with them on a low income is not their partner and would otherwise trigger loss of the single person discount.
An additional council tax charge that councils in England, Wales and Scotland may levy on second homes and long-term empty properties.
A 25% reduction in Council Tax for anyone who is the only adult (18+) counted as resident in a property.
A measure comparing your total monthly debt repayments to your gross income, used by lenders to assess affordability.
A civil law concept, used in many European jurisdictions and referenced by UK-style structural warranties, imposing 10 years of strict liability on builders and designers for major structural defects in a building.
A government benchmark setting minimum quality, safety and repair conditions that homes, particularly social housing, are expected to meet.
A lender's initial indication of how much it might lend a borrower, based on a quick check of income and credit history, before a full mortgage application.
A legal document recording how co-owners hold the beneficial interest in a property, including unequal shares reflecting different deposit contributions, separate from the property's legal title.
A legal document recording how two or more people own a property and share its equity, proceeds and ongoing costs.
A fixed period, typically 6 to 12 months, after practical completion of a construction contract during which the contractor is obliged to return and fix any defects that appear at their own cost.
An arrangement with your council letting you delay paying residential care fees by securing the debt against your home until it is sold or your estate settles.
A mortgage indemnity scheme letting buyers purchase a new-build home with a 5% deposit, backed by housebuilder-funded insurance for the lender.
A short-term loan used to fund the construction or major renovation of a property, released to the borrower in stages as building work progresses, and repaid on sale or refinance once complete.
A variable-rate mortgage priced at a set discount below the lender's standard variable rate for an initial period, so payments rise and fall in line with changes to that lender's own SVR.
A mortgage deal offering a set discount off the lender's standard variable rate for an introductory period.
The district rate is the locally set portion of Northern Ireland's property rates, charged by each council to fund local services such as bins, leisure and parks.
A fee some lenders charge if you repay or overpay your mortgage beyond agreed limits during a fixed or discounted deal period.
A legal right for one landowner to use, or restrict the use of, another's land for a specific purpose, such as a right of way or a right to run pipes, without owning that land.
A certificate rating a property's energy efficiency on a scale from A (most efficient) to G (least efficient), required on sale or rental of most UK residential and commercial buildings.
Energy Performance Certificate — required for UK property sales/lettings.
The A-to-G energy efficiency grade shown on an Energy Performance Certificate, legally required when a property is built, sold, or let, with a minimum E rating currently required for most rental properties in England and Wales.
A financial product allowing homeowners aged 55 or over to access the equity in their home as a lump sum or drawdown facility, without having to sell or move out.
An annual fee charged to freehold homeowners on some new-build estates for maintaining shared roads, drainage, landscaping or amenities that have not been adopted by the local council.
An annual charge on freehold homeowners on some new-build estates, covering the maintenance of shared amenities such as roads, drainage and open spaces that have not been adopted by the local council.
External Wall System form certifying cladding safety on flats over 11m — needed for mortgage.
The point in a UK property purchase when buyer and seller sign and swap contracts, making the sale legally binding and committing both parties to completion.
A government scheme offering first-time buyers a 30–50% discount on the price of certain new-build homes.
A mortgage where the interest rate is locked for an initial period (commonly 2, 5 or 10 years), so monthly repayments stay the same regardless of Bank of England base rate changes.
The distinction, used when buying or selling a property, between fixtures (items permanently attached and normally included in the sale) and fittings (movable items the seller can usually take).
A company, often owned by the leaseholders themselves, that owns the freehold or holds responsibility for managing a block of flats, collecting service charges and arranging maintenance, insurance and repairs.
A critical term for new-build homes sold as freehold but still charged ongoing estate management fees for shared roads, drainage and green space that a council has not adopted.
A mortgage that lets you overpay, underpay or take payment holidays, giving more control over your repayments.
A flying freehold is a part of a freehold property that sits over, under, or projects into land or space belonging to someone else.
Full and permanent ownership of property and the land it sits on.
A former UK tax regime for short-term holiday rental properties that granted trading-style tax advantages. The FHL regime was abolished from 6 April 2025; affected properties are now treated as standard residential lets.
A former special tax status for qualifying short-term holiday let properties, giving access to certain business tax reliefs not available to ordinary residential lets, abolished from April 2025 so all lets are now taxed under the same property income rules.
Extra borrowing arranged with an existing mortgage lender, secured on the same property under the same first charge, rather than taking out a separate loan or remortgaging to a new lender.
Extra borrowing taken from an existing mortgage lender, on top of the current mortgage balance, without switching lender or waiting for the current deal to end.
When a seller accepts a higher offer from a new buyer after already accepting an offer from another buyer, but before contracts are legally exchanged.
When a buyer lowers their offer on a property, often at the last minute just before exchange of contracts, putting pressure on the seller to accept less or risk the sale collapsing.
Money given, not lent, by a family member or other third party to help a buyer fund a property deposit, which mortgage lenders require to be documented in a signed gifted deposit letter.
A mortgage that offers a preferential interest rate, cashback or a larger borrowing amount to buyers of highly energy-efficient homes, or to homeowners making green home improvements.
A simple measure of a buy-to-let property's annual rental income as a percentage of its purchase price, before deducting any costs.
A payment a leaseholder makes to the freeholder for the land on which a leasehold property stands.
A period of widespread criticism, beginning around 2016-2017, of new-build leasehold houses and flats sold with escalating ground rents (often doubling every 10-15 years), which prompted the government reforms that followed.
A mortgage where a third party, often a family member, agrees to cover repayments if the borrower cannot.
Closed UK government scheme — Equity Loan ended 2023, ISA closed to new accounts 2019.
A former government scheme providing an interest-free equity loan (typically 20%, or 40% in London) towards a new-build home for the first five years, after which interest becomes payable, now closed to new applicants.
The official public record of who owns a registered property in England and Wales, what it is worth (last sold for), and what rights, restrictions or charges affect it.
A mandatory licence required from the local council to let a House in Multiple Occupation to five or more unrelated tenants forming more than one household, with additional discretionary licensing schemes covering smaller HMOs in some areas.
A council permission required to legally let a House in Multiple Occupation, ensuring the property meets safety, amenity and management standards for shared occupants.
A form of equity release in which a homeowner sells all or part of their property to a provider at a discount to market value, in exchange for a lump sum and the right to live there rent-free for life.
A mid-level property survey that assesses a home's condition and flags significant defects, helping buyers make an informed decision before purchase.
A property let to three or more unrelated tenants who share a kitchen, bathroom, or other facilities, subject to additional safety, space, and (above a certain size) mandatory licensing requirements beyond an ordinary single-let rental.
Rental profits taxed as non-savings income at your marginal Income Tax rate.
The percentage by which a buy-to-let property's expected rental income must exceed the mortgage interest payment, typically 125% to 145%, used by lenders to size the maximum loan available.
A mortgage where monthly payments cover only the interest charged, leaving the full original loan amount still owed at the end of the term unless a separate repayment plan clears it.
An invasive plant whose presence near a property can damage structures, reduce value, and complicate mortgage lending and a sale.
An invasive plant that can damage structures and complicate a property sale, since most mortgage lenders require evidence of a management plan or professional treatment before agreeing to lend.
A mortgage where more than one person is responsible for repayments but only one person is named as the legal owner of the property.
A mortgage where a family member's income is included to boost borrowing capacity, but only the person actually living in the property is named on the title deeds, avoiding the additional stamp duty surcharge that would apply to a second homeowner.
A way for two or more people to jointly own a property where all owners hold the whole property equally together, and a deceased owner's interest passes automatically to the surviving owner(s), not under their will.
A declaration allowing married couples to split rental income in proportions other than 50/50, matching actual beneficial ownership.
Scotland's property transaction tax, replacing SDLT since 2015, with rates set by Revenue Scotland and a 6% Additional Dwelling Supplement for second properties.
LBTT is the tax paid when you buy a residential or commercial property or land in Scotland, replacing Stamp Duty north of the border.
Wales's equivalent of Stamp Duty Land Tax, administered by the Welsh Revenue Authority, with different rate bands applying to residential and non-residential property.
Land Transaction Tax is the Welsh tax on buying property or land in Wales, replacing Stamp Duty since April 2018.
A specialist insurance policy for rented property, combining buildings and (optionally) contents cover with landlord-specific risks such as loss of rent, malicious tenant damage and public liability.
A mandatory ombudsman scheme, introduced under the Renters' Rights Act, that all private landlords in England must join, giving tenants a free route to resolve complaints without going to court.
Land and Buildings Transaction Tax — Scotland's equivalent of Stamp Duty.
A landlord's right to end a lease early and take back possession of a property when a tenant breaches a lease term, such as failing to pay rent, subject to strict legal procedures and the tenant's right to seek relief.
Property ownership for a fixed term — you own the home but not the land.
A leaseholder's legal right to buy the freehold of their home or extend the lease, usually for a premium paid to the landlord.
The legal process of adding years to a leasehold property's remaining term, usually for a premium, to preserve its value and mortgageability.
An annual charge payable by a leaseholder to the freeholder under the lease, now restricted to a peppercorn (effectively nil) for most new residential long leases granted since 30 June 2022.
A mortgage arrangement where a homeowner rents out their existing property, usually by remortgaging it onto a buy-to-let deal, in order to raise a deposit and buy a new home to live in.
A CGT relief of up to GBP 40,000 when you sell a former main home that you also let out while sharing occupancy with tenants.
A Capital Gains Tax relief, now tightly restricted, for landlords who let out a property that was also their main home.
The most common form of equity release, letting older homeowners borrow against their property with no required monthly repayments.
The size of a mortgage expressed as a multiple of the borrower's annual income, used by lenders and regulators to assess how much someone can responsibly borrow.
The ratio of a mortgage loan to the property's value, expressed as a percentage, used by lenders to price and assess risk.
The size of a mortgage expressed as a percentage of the property's value -- a lower LTV (bigger deposit) usually unlocks cheaper interest rates.
A conveyancing search of council records that reveals planning permissions, building regulation approvals, road schemes and other local authority matters affecting a property before purchase.
Land Transaction Tax — Wales' equivalent of Stamp Duty.
Mortgage as a percentage of property value — determines mortgage rate.
Historic rights, such as mineral or sporting rights, retained by a lord of the manor over land they once owned, which can still bind a current owner even though registration deadlines have now passed.
The extra value released when a short lease is extended or the freehold bought, reflecting the jump in combined property value once the lease no longer restricts a mortgageable term; shared 50/50 with the freeholder once the lease is below 80 years.
The increase in a property's combined value created by merging the leasehold and freehold interests, which was historically shared 50/50 with the freeholder on short lease extensions.
Regulations that set a minimum Energy Performance Certificate rating a rented property must meet before it can legally be let, currently EPC E, with plans to raise this to EPC C for new tenancies.
A property with both residential and commercial elements -- such as a shop with a flat above -- which qualifies for non-residential SDLT rates, usually lower than the standard residential schedule.
A property containing both residential and commercial elements, qualifying for non-residential SDLT rates (max 5%) rather than the higher residential rates.
A fee charged by a lender for setting up a mortgage deal, which can often be added to the loan itself or paid upfront, and should be weighed against the interest rate when comparing deals.
A voluntary agreement between major UK mortgage lenders and the government setting out support options for homeowners struggling with repayments, such as switching to interest-only or extending the term temporarily.
A government-backed guarantee enabling lenders to offer 5% deposit mortgages to buyers with smaller deposits.
A temporary, agreed pause or reduction in mortgage payments granted by a lender during a period of financial difficulty, with interest normally continuing to accrue and the term or payments adjusted afterwards.
A lender's conditional indication of how much it might lend you, based on a soft credit and affordability check before a full application.
The fixed validity period, typically three to six months, during which a formal mortgage offer remains open for a buyer to complete their purchase before it lapses and needs to be renewed or reissued.
Transferring your existing mortgage deal, including its interest rate, to a new property when you move home.
A borrower who is up to date with their mortgage payments but cannot switch to a cheaper deal because their loan is held by an inactive lender or unregulated entity and they fail current mortgage affordability rules.
The fixed monthly payment that clears a repayment mortgage over its term, covering capital and interest.
When a lender holds back part of an agreed mortgage until specified repairs or works on the property are completed.
A lender check confirming you could still afford your mortgage if interest rates rose above the current level.
An SDLT relief allowing a lower average-rate calculation when buying multiple residential properties in one transaction, abolished 1 June 2024.
A former Stamp Duty Land Tax relief that let buyers of two or more dwellings in a single transaction calculate SDLT on the average price per dwelling rather than the total price. Abolished for transactions completing on or after 1 June 2024.
A situation where a property is worth less than the outstanding mortgage secured against it, leaving the owner unable to sell without repaying the shortfall or unable to remortgage onto a better rate without additional funds.
A buy-to-let property's annual rental income after deducting all running costs, expressed as a percentage of its value -- a more realistic measure of actual return than gross yield.
A structural warranty, typically lasting 10 years, that protects buyers of newly built UK homes against major defects in design, workmanship or materials.
A new-build home warranty and insurance policy, most commonly provided by the National House Building Council, covering structural defects for up to ten years after completion.
A safeguard, required of all Equity Release Council-approved lifetime mortgages, ensuring a borrower or their estate will never owe more than the property is worth when it is eventually sold.
The abolition of Section 21 'no-fault' evictions in England under the Renters' Rights Act, meaning landlords must give a specific legal reason to end a tenancy rather than simply giving notice.
CGT payable by non-UK residents on gains from UK property disposals, with a mandatory 60-day reporting deadline.
A UK tax scheme that requires letting agents and tenants to withhold 20% income tax from rental payments made to non-UK resident landlords, unless HMRC has approved the landlord to receive rents gross via the NRL1 application.
An extra rate of Stamp Duty Land Tax charged on top of standard SDLT when a non-UK resident buys residential property in England or Northern Ireland.
Northern Ireland's property tax, replacing council tax, charged annually on a home's capital value using combined regional and district rate poundages.
A mortgage linked to your savings, where the savings balance reduces the loan amount you pay interest on.
The linked sequence of property transactions where each buyer's purchase depends on their own sale completing, so a delay or collapse anywhere in the chain can affect every transaction in it.
An election allowing a business to charge 20% VAT on otherwise VAT-exempt supplies of commercial land or buildings, enabling recovery of related input VAT.
A deferred payment from a land or property sale triggered if the land achieves planning permission or a higher value within an agreed period after the sale.
A right or interest in registered land that binds a buyer even though it does not appear on the Land Registry title register, such as an occupier's beneficial interest or a legal easement.
A written agreement, governed by the Party Wall etc. Act 1996, that sets out rights and protections when building work affects a shared wall or boundary.
A nominal or zero ground rent, often literally "one peppercorn a year" if demanded at all, now standard on new long leases and statutory lease extensions since ground rent reform removed financial ground rents on qualifying new leases.
Rules allowing certain building works and changes of use to be carried out without a full planning application, subject to specified limits and conditions.
A property investor with four or more mortgaged buy-to-let properties, a threshold used by mortgage lenders to apply enhanced underwriting criteria when assessing new applications.
Transferring an existing mortgage deal, including its interest rate and any remaining fixed or discount period, onto a new property when moving home, avoiding an early repayment charge but requiring fresh affordability underwriting.
A promise attached to land requiring the owner to actively do something, such as maintain a fence or contribute to shared costs, as opposed to a restrictive covenant, which stops an action.
The point in a UK construction contract at which the works are complete enough for the client to take possession and use the building, even though minor defects or snagging items may remain outstanding.
An easement acquired not by formal grant but through at least 20 years of continuous, open use of another's land as of right, without permission, force or secrecy.
A CGT exemption for gains on the sale of your main home, covering the period you lived there plus the final 9 months of ownership.
A Capital Gains Tax exemption for gains made on selling your main home. If you lived in the property as your main home for the entire ownership period, the full gain is exempt. The final 9 months of ownership always qualify, even if you moved out.
Switching to a new mortgage deal with your existing lender when your current fixed or discounted rate ends, without moving to a different lender or a full remortgage application.
Tax-free £1,000 a year of gross UK property rental income.
Enquiries made during conveyancing to uncover legal, environmental and local-authority issues affecting a property before you complete a purchase.
NI's property tax — replaces Council Tax, made up of a regional rate and a district rate based on capital value.
The Regional Rate is the portion of Northern Ireland's domestic and non-domestic property rates set by the NI Executive to fund region-wide public services.
Replacing an existing mortgage with a new one, either with the same lender or a different one, typically to secure a better interest rate, release equity, or move away from an expiring deal onto the lender's SVR.
Switching a mortgage to a new deal, either with the existing lender (a product transfer) or a new one, usually done when a fixed or tracker rate is ending.
A tax exemption letting you earn up to £7,500 a year tax-free from letting a furnished room in your own home.
Lets owner-occupiers earn up to £7,500 a year tax-free by letting a furnished room.
A landlord insurance policy that covers lost rental income if a tenant stops paying rent, often sold alongside legal expenses cover for the costs of pursuing arrears or eviction.
A First-tier Tribunal order requiring a landlord to repay up to 12 months' rent to a tenant or local council as a penalty for specified housing offences, including operating an unlicensed HMO or illegal eviction.
An arrangement where a tenant pays rent with an option or right to purchase the property at a pre-agreed price after a specified period.
An arrangement where someone rents a property from a landlord and then sub-lets it to tenants, keeping the margin between the two rents.
Landmark reform of the private rented sector in England — including abolishing Section 21 'no-fault' evictions and introducing a mandatory landlord ombudsman — being brought into force in stages.
A mortgage where each monthly payment covers both interest and a slice of the capital borrowed, so the loan is fully paid off by the end of the agreed term.
A relief letting residential landlords deduct the cost of replacing furnishings and appliances provided for tenants, but not the initial purchase.
Tax relief for landlords replacing domestic items in furnished residential lettings, replacing the old Wear and Tear Allowance.
A binding obligation that limits how land, property or a person can be used, such as restricting building work or post-employment competition.
A legally binding condition in a property's title deeds that limits how the land can be used, such as prohibiting commercial use, further building, or keeping livestock.
A mortgage for older borrowers where you pay only the monthly interest, with the capital repaid when you die, sell, or move into long-term care.
A legal requirement for the landlord of a block of flats to offer existing qualifying leaseholders the chance to buy the freehold before selling it to an outside third party.
A type of easement giving a person the legal right to cross another person's land to reach a property, road or public place, either as a private right or a public footpath.
A scheme letting eligible housing association tenants in England buy their rented home at a discount, similar to Right to Buy.
A government scheme allowing eligible council and housing association tenants in England to buy their home at a discount of up to £102,400 (£136,400 in London).
The reduction from market value given to eligible council tenants buying their home under the Right to Buy scheme, capped at a maximum amount and subject to repayment if the property is sold within five years.
Reduced maximum cash discounts available to social housing tenants buying their council home under Right to Buy, cut sharply from 2024 to slow the loss of social housing stock.
An easement giving a property owner the right to receive a minimum level of natural light through defined windows, which can restrict what a neighbouring landowner is permitted to build.
Statutory right of leaseholders to take over building management from freeholder.
A legal duty on landlords in England to verify that a prospective tenant has the immigration status to lawfully rent residential property, before granting a tenancy, with civil and criminal penalties for non-compliance.
Stamp Duty Land Tax — the property transaction tax in England and Northern Ireland.
A 5-percentage-point Stamp Duty Land Tax surcharge on top of standard rates, payable in England and Northern Ireland when buying an additional residential property, such as a second home or buy-to-let.
A secured loan taken against a property that already has a mortgage, ranking behind the first lender if the home is repossessed.
A legally binding agreement between a developer and local planning authority, under the Town and Country Planning Act 1990, that secures contributions or obligations to offset the impact of new development.
The legal process a landlord must follow before charging leaseholders more than £250 each for major building works, or risk having recoverable costs capped.
Statutory consultation notice freeholder must serve before major works costing £250+/flat.
A no-fault eviction notice that landlords in England can use to end an assured shorthold tenancy without giving a reason, requiring at least two months' written notice.
Rule limiting buy-to-let landlords' mortgage interest relief to a 20% basic-rate tax credit.
Since April 2020, UK landlords can no longer deduct mortgage interest costs from rental income to calculate profit. Instead, they get a 20% tax credit on the full mortgage interest paid. This means higher-rate taxpayers pay significantly more tax on the same rental income.
The mechanism by which Section 24 restricts individual buy-to-let landlords to a 20% basic-rate tax credit on mortgage interest and other finance costs, rather than deducting them as a normal expense against rental income.
The rule preventing individual buy-to-let landlords from deducting mortgage interest as an expense against rental income, instead giving a 20% basic-rate tax credit on finance costs, which can push some landlords into higher tax bands.
A fault-based notice a landlord can serve to begin repossessing a property from an assured shorthold tenant, relying on one or more statutory grounds such as rent arrears, anti-social behaviour, or breach of tenancy terms.
A local authority power requiring all private landlords in a designated area to hold a licence for each rented property, regardless of property size or type.
A specialist mortgage that releases funds in stages to finance building your own home rather than buying a completed property.
A recurring payment leaseholders make towards the maintenance and running costs of a building and its shared areas.
The sum leasehold flat owners pay toward the cost of maintaining, insuring, and managing the building and communal areas, usually a proportion of total costs set by the lease, payable on top of any ground rent.
The legal process of converting a joint tenancy in property into a tenancy in common, so each owner holds a distinct, separable share.
An arrangement where the leaseholders of a block of flats jointly own the freehold of the building, usually through a shared company, alongside holding their individual leases.
A discontinued form of equity release, sold mainly by a small number of UK lenders in the late 1990s, in which the loan was interest-free but the lender took a share -- commonly 75% -- of any increase in the property's value when it was eventually sold.
An umbrella term for government or developer schemes where a third party takes a percentage stake in a home to reduce the deposit and mortgage a buyer needs.
A scheme where you buy 25–75% of a home and pay subsidised rent on the rest.
The process by which a shared ownership leaseholder buys additional shares in their property from the housing association over time, increasing their equity stake and reducing the rent paid on the remaining share.
A home finance product, most commonly structured as a Home Purchase Plan, that avoids charging interest in order to comply with Islamic law, instead using rent or profit-based payment structures.
A reserve of money set aside over time to pay for known future large costs, commonly used for building repairs in leasehold property.
A reserve fund built up gradually from leaseholders' service charge contributions to pay for large, infrequent future costs, such as roof or lift replacement, without needing a sudden one-off bill.
A written record of minor defects and unfinished items in a newly built home, compiled by the buyer or a professional snagging inspector shortly after completion, for the builder to fix under the new-build warranty.
The process of buying additional shares in a shared ownership home to increase the percentage you own.
The process by which a shared ownership leaseholder buys additional shares in their property over time, gradually increasing their ownership percentage and reducing the rent payable on the remaining share still owned by the housing association.
The tax paid when buying residential or commercial property in England and Northern Ireland. Scotland uses LBTT and Wales uses LTT instead.
The default mortgage interest rate a lender charges once an introductory fixed or discounted deal ends.
A leaseholder's legal right to extend a residential lease by a set period at a peppercorn (zero) ground rent, once they have owned the property for at least two years.
The statutory limit on how much a landlord in England can ask for as a security deposit on an assured shorthold tenancy: five weeks' rent where annual rent is under £50,000, or six weeks' rent above that threshold.
A government-authorised scheme that a landlord must use to protect a tenant's deposit within 30 days of receipt on an assured shorthold tenancy, either holding the money (custodial) or insuring it while the landlord retains it (insured).
A government-approved scheme in England that landlords must use to protect a tenant's deposit within 30 days of receiving it, with tenants able to claim up to three times the deposit if the rules are broken.
A way for co-owners to hold property in distinct, definable shares that can be passed on individually rather than automatically to the other owner.
Legislation banning most letting fees charged to tenants in England, capping holding deposits at one week's rent and security deposits at five (or six) weeks' rent, and restricting default fees to specific, evidenced circumstances.
A way for two or more people to jointly own a property where each owner holds a defined (not necessarily equal) share, and that share passes under their will rather than automatically to the other owners.
A one-off insurance policy protecting a buyer, owner or lender against financial loss from a specific defect in a property's legal title, such as a missing easement or restrictive covenant breach.
A variable-rate mortgage where the interest rate directly follows the Bank of England base rate plus a fixed margin, rising and falling automatically when the base rate changes.
A charge for the lender's own basic assessment of a property's value before approving a mortgage, distinct from -- and less thorough than -- a homebuyer's report or full structural survey.
A period when a rental property is empty and earning no rent, during which the landlord continues to bear costs such as Council Tax, utilities and mortgage interest.
A former tax relief for landlords of furnished residential properties, allowing a flat 10% deduction of net rent for the cost of replacing furnishings. It was abolished from April 2016 and replaced by the Replacement of Domestic Items Relief.
The 52-week look-back period used to calculate a week's pay for statutory holiday entitlement where a worker's pay varies, such as for those without fixed hours or fixed pay, replacing the previous 12-week reference period.
An earnings-related top-up to the old Basic State Pension, built up by employees before 6 April 2016, originally called SERPS and later the State Second Pension (S2P).
Statutory rights for temporary workers supplied through an employment agency, giving day-one rights to access certain facilities and, after 12 weeks in the same role, equal pay and basic working conditions to comparable directly-employed staff.
UK rules giving temporary agency workers equal basic working conditions to permanent staff after 12 weeks in the same role.
A contract that sets total working hours across a whole year rather than per week, letting employers vary the pattern with demand.
HMRC-approved mileage rates for employees using their own vehicle for work: 45p/mile (first 10,000 miles), 25p/mile thereafter; motorcycles 24p, bicycles 20p.
HMRC's approved tax-free rate for mileage payments to employees using their own vehicles for business travel: 45p per mile for the first 10,000 miles and 25p per mile above that.
A court order requiring an employer to deduct money directly from an employee's wages to repay a debt or unpaid fine.
A court order requiring an employer to deduct money from an employee's wages to repay a debt (such as unpaid council tax, maintenance payments, or court fines) and send the deductions to the creditor.
An employer's option to delay assessing and enrolling an eligible worker into a workplace pension for up to three months from their start date or the date they first become eligible.
A non-cash perk from your employer — such as a company car or private medical cover — taxed via P11D and Class 1A employer NI.
DWP benefit for surviving spouse/partner under State Pension age — up to £9,800.
A cash payment from an employer in lieu of a company car. Taxable as employment income via PAYE and National Insurance, unlike a company car Benefit in Kind.
A voluntary workplace scheme where an employee formally registers as an unpaid carer, giving managers a consistent record of their caring responsibilities and agreed flexibility or support.
A day-one statutory right for employees with a dependant who has a long-term care need to take up to one week of unpaid leave per year to provide or arrange care.
The CO2-emissions-based percentage bands HMRC uses to calculate the taxable benefit-in-kind value of a company car, ranging from 3% for pure electric vehicles up to 37% for the highest-emission petrol and diesel models.
A historic arrangement where employees left part of the state pension in exchange for paying lower National Insurance and building benefits in a workplace scheme instead.
A salary-sacrifice arrangement letting employees obtain a bike and safety equipment from gross pay, cutting Income Tax and National Insurance.
A proposed employment right, under the Employment Rights Bill, that would let employees claim unfair dismissal from their first day of a job instead of after two years' service.
An employee benefit that pays a tax-free lump sum to your beneficiaries, usually a multiple of salary, if you die while employed.
Two main pension types: DB pays a guaranteed income based on salary and service; DC builds a pot you invest and draw from.
Employee benefit schemes that let staff draw down pay they have already earned but not yet been formally paid, ahead of their normal payday, usually for a small fee.
A workplace benefit letting employees lease a fully electric car through salary sacrifice, cutting Income Tax and National Insurance while benefiting from a low company car Benefit in Kind rate.
A salary sacrifice childcare benefit, closed to new entrants since October 2018, letting existing members exchange up to GBP 55 a week of salary for tax and NI free childcare vouchers.
Employer NI paid at 15% on employee earnings above GBP 5,000 per year from April 2025 -- an additional employment cost on top of gross salary, not deducted from the employee's pay.
Wide-ranging UK employment law reform covering day-one unfair dismissal rights, guaranteed hours for zero-hours workers, stronger sick pay and stronger protections against harassment and unfair fire-and-rehire.
A voluntary, contractual redundancy payment an employer chooses to offer above the statutory minimum, typically calculated using a more generous formula and often taxed the same way as statutory redundancy pay up to the £30,000 exemption.
A voluntary payment made without any legal obligation, often by an employer on termination, recognising a moral rather than contractual duty.
A certificate from a doctor or other authorised healthcare professional confirming whether someone is unfit for work, or may be fit for work with adjustments, used to support sick pay and benefit claims.
Statutory protections for employees on contracts that end on a specified date or event, giving broadly equal treatment to comparable permanent employees, and preventing repeated renewal beyond four years without becoming permanent.
A statutory right allowing employees to ask their employer to change their hours, working pattern or location of work.
A working pattern in which employees work four days instead of five, sometimes for the same pay if productivity is maintained.
Garden leave is when an employee serving notice is told to stay away from work while remaining employed and paid in full.
A labour market of short-term, flexible, task-based work where individuals are usually self-employed or workers rather than employees, often arranged via apps or platforms.
An employer-arranged insurance policy that pays a regular income to employees who cannot work long-term due to illness or injury.
A workplace pension arranged by an employer as a collection of individual personal pension contracts, one per employee, rather than a single trust-based occupational scheme.
A proposed right, under the Employment Rights Bill, for zero-hours and low-hours workers to be offered a contract reflecting the hours they regularly work, plus reasonable notice of shifts.
A tax charge that claws back Child Benefit for families where the highest earner has an adjusted net income over £60,000.
The way statutory paid holiday entitlement builds up over the course of a leave year, particularly for irregular-hours and part-year workers who accrue it as a percentage of hours actually worked.
Up to 10 optional days an employee on maternity, adoption, or shared parental leave can work for their employer without losing Statutory Maternity Pay or the corresponding leave entitlement for that week.
The weekly earnings floor for NI credits — £129/week in 2026/27; below this, employees earn no NI credits.
A higher, voluntary hourly rate calculated by the Living Wage Foundation to reflect the higher cost of living in London, above both the Real Living Wage rate used elsewhere and the statutory National Living Wage.
A reward an employer gives for long continuous service, which can be tax-free up to set limits provided strict HMRC conditions are met.
The minimum weekly earnings threshold (GBP 125/wk, GBP 6,500/yr in 2026/27) at which employees are treated as paying NICs for benefit entitlement purposes, even though no NI is actually deducted.
A multi-employer, trust-based workplace pension scheme, such as NEST or NOW: Pensions, used by many different unrelated employers to meet their auto-enrolment duties under one shared governance structure.
A weekly payment for pregnant women who do not qualify for Statutory Maternity Pay, such as the self-employed or those with insufficient employment history.
An employer policy setting out how the business supports staff experiencing menopause symptoms, covering things like flexible working, temperature control, uniform adjustments and manager training.
A contribution paid on earnings that funds the State Pension and some benefits.
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.
The minimum hourly rate employers must pay workers under 21. In 2026/27: £10.85 for ages 18-20, £8.00 for under-18s and apprentices. Workers aged 21 and over are covered by the National Living Wage (£12.71).
The maximum daily amount an employer can deduct or charge for provided accommodation before it starts reducing pay below the National Minimum Wage -- £11.10 a day in 2026/27.
The statutory minimum hourly pay rates for UK workers: GBP 12.21/hour for workers aged 21+ (National Living Wage) from April 2025, with lower rates for younger workers and apprentices.
A reduced National Minimum Wage rate that applies to apprentices aged under 19, or apprentices of any age in the first year of their apprenticeship, set at 8.00 pounds per hour from April 2026.
A UK statutory entitlement, in force since April 2025, giving eligible parents up to 12 weeks of additional leave and pay if their baby receives neonatal care shortly after birth, on top of existing maternity, paternity, or adoption leave.
NEST is the government-backed workplace pension scheme set up to deliver auto-enrolment, accepting any UK employer that wants to use it.
Practical changes an employer makes to support staff with conditions such as autism, ADHD or dyslexia, which can be a legal requirement under the Equality Act where the condition meets the definition of a disability.
Statutory protections under the Working Time Regulations for employees who regularly work at least three hours during the night period, including a limit on average night working hours and a right to free health assessments.
UK statutory minimum hourly pay — £12.71 for 21+ from April 2026.
The length of time an employee or employer must give before ending employment, made up of a statutory legal minimum and any longer period set out in the employment contract.
An employer's own, typically more generous, contractual sick pay scheme that tops up or replaces Statutory Sick Pay, often paying full or part salary for a set number of weeks.
The one-month window after being automatically enrolled into a workplace pension during which a worker can opt out and receive a full refund of any contributions already deducted.
The post-2017 rules that limit the tax savings from salary sacrifice on most benefits in kind.
A taxable employment benefit reported to HMRC on form P11D, on which the employee pays Income Tax and the employer pays Class 1A NI.
The practice of openly sharing information about pay, salary ranges and pay-setting criteria to promote fairness and reduce pay gaps.
An arrangement where the employer pays the tax and NI on minor employee benefits in one annual payment.
A payment an employer makes instead of requiring you to work your notice period, ending employment immediately while compensating for that notice.
The rule requiring all payments in lieu of notice, whether contractual or not, to be taxed as earnings and subject to Income Tax and National Insurance, following reforms that took effect from April 2018.
A scheme letting employees donate to charity directly from gross pay, giving immediate Income Tax relief at their marginal rate.
Taxing benefits in kind through payroll in real time rather than via P11D — being made mandatory for most benefits.
A legal statement from your employer showing your gross pay, deductions and net (take-home) pay.
The fully taxable element of a termination payment that covers the unworked notice period.
Payment in Lieu of Notice — taxable redundancy/dismissal payment for notice period.
The UK student loan plan for most English and Welsh students who started university before September 2012, repaid at 9% of income above £26,900 in 2026/27.
The UK student loan plan for English and Welsh students who started university between September 2012 and 2023, repaid at 9% of income above £29,385 in 2026/27.
The UK student loan plan for Scottish students, with the highest repayment threshold of any plan at £33,795 for 2026/27, repaid at 9% of income above that.
UK student loan plan for English students starting from 2023 — 40-year repayment window.
A UK student loan for master's or doctoral study, repaid at 6% of income above GBP 21,000 a year and collected alongside any undergraduate loan.
Health insurance covering private hospital treatment. If provided by an employer, it is a taxable Benefit in Kind, increasing income tax and NI liability.
The band of earnings, between £6,240 and £50,270 a year (2026/27), used to calculate the minimum auto-enrolment pension contributions an employer and worker must pay.
A voluntary, independently calculated wage based on living costs — higher than the statutory minimum.
The legally required minimum period during which an employer must consult employees or their representatives before making them redundant, with the length depending on the number of proposed redundancies.
A tax exemption letting an employer reimburse up to GBP 8,000 of an employee's qualifying job-relocation costs free of income tax and National Insurance.
A proposed employment right allowing staff to disconnect from work communications outside contracted hours without facing detriment, likely to be implemented as a code of practice rather than a hard legal ban on out-of-hours contact.
An arrangement where holiday pay is added to each pay packet as a percentage uplift rather than paid when leave is actually taken.
An employer-arranged benefit letting staff draw down a portion of wages they have already earned before the normal payday, typically for a small fee, as an alternative to a high-cost short-term loan.
Giving up part of your salary in exchange for non-cash benefits — saves tax and NI.
An all-employee share option scheme where employees save GBP 5-500/month for 3 or 5 years, then use savings to buy employer shares at a fixed option price, with the gain income tax-free.
An interest-free or low-interest loan from an employer to buy an annual travel season ticket, exempt from tax as a benefit in kind if the total balance stays within HMRC's small loan limit.
A legally binding contract where an employee waives certain employment claims, usually in return for a payment when leaving a job.
An HMRC-approved employee share scheme offering income tax and NI savings on shares in the employer, provided shares are held for 5 years.
A UK statutory entitlement allowing eligible parents to share up to 50 weeks of leave and 37 weeks of Statutory Shared Parental Pay after the birth or adoption of a child.
A statutory payment letting eligible parents share leave and pay in the first year after a child's birth or adoption.
The HMRC form a new employee completes when they have no P45, so the right tax code can be applied.
A statutory payment from an employer to an eligible employee who is adopting a child or having one through a surrogacy arrangement, paid while on adoption leave.
A statutory payment for eligible employees taking adoption leave when a child is placed with them, mirroring statutory maternity pay.
The minimum weekly pay an eligible employee must receive during maternity leave: 90% of average earnings for the first 6 weeks, then the lower of 90% of earnings or £194.32 a week for up to 33 further weeks.
The legal minimum total pension contribution employers must pay under auto-enrolment — 8% of qualifying earnings, of which at least 3% must come from the employer.
A statutory payment for eligible employed parents whose new baby receives neonatal care in hospital, providing up to 12 additional weeks of paid leave on top of maternity, paternity, or adoption leave.
The legal minimum notice an employer must give an employee (and vice versa) to end employment, rising with length of service from one week up to a maximum of 12 weeks under the Employment Rights Act 1996.
Paid leave and pay for employed parents whose child dies under 18, or who suffer a stillbirth after 24 weeks of pregnancy.
A new father or partner's right to take up to two weeks off work around the birth or adoption of a child, paid at a flat statutory rate or 90% of average earnings if lower.
The minimum weekly pay an eligible employee can receive while on paternity leave, for up to 2 weeks, capped at the lower of 90% of average earnings or £194.32 a week in 2026/27.
The legal minimum notice period an employer must give an employee before their redundancy takes effect, based on length of service, separate from and in addition to statutory redundancy pay.
The minimum legal payment for employees made redundant after two or more years of service.
A weekly payment of £123.25 (2026/27) that employers must pay eligible employees who are too ill to work, for up to 28 weeks.
A fixed percentage of income above a plan threshold, collected through PAYE or Self Assessment.
The amount of salary you actually receive after Income Tax, National Insurance and other deductions.
UK government scheme: 20% top-up on childcare costs, max £2,000/year per child.
UK law in force from 1 October 2024 requiring employers to pass all qualifying tips to workers in full, with a written policy and 3-year record-keeping obligation.
A small employee perk that is exempt from tax and National Insurance, provided it meets strict HMRC conditions on cost and purpose.
UK employment law rules that automatically transfer employees, their contracts, and most terms and conditions to a new employer when a business, part of a business, or a service contract changes hands.
The earnings ceiling above which employee NI drops from 8% to 2% — £50,270/year in 2026/27.
A means-tested benefit that replaced six legacy benefits for working-age claimants. Payments are based on earnings, savings and household circumstances.
Statutory protection under the Public Interest Disclosure Act 1998 for workers who make a "protected disclosure" about wrongdoing, giving them the right not to be dismissed or subjected to detriment as a result, with no qualifying service period or compensation cap for dismissal claims.
A tax and National Insurance free childcare benefit where an employer provides or part-funds a workplace nursery, unlike Tax-Free Childcare or Childcare Vouchers which are capped.
Employer-arranged pension under auto-enrolment — minimum 8% total contribution on qualifying earnings.
The employment rights of workers on zero-hours contracts, including minimum wage, holiday pay, and from 2026 the right to request guaranteed hours after 12 weeks.
A class of fund units where income such as dividends and interest is reinvested automatically rather than paid out to the investor.
An ISA allowance inherited by a surviving spouse or civil partner, equal to the value of the deceased partner's ISA, allowing them to maintain tax-free savings.
An earnings-related top-up to the basic State Pension (built up mainly through SERPS and the State Second Pension) available only to people who reached State Pension age before 6 April 2016.
Extra payments you can make into your workplace pension on top of standard contributions to boost your eventual retirement savings.
Total taxable income plus all employer and personal pension contributions — used to size the taper.
An FCA and HM Treasury review of the dividing line between regulated financial advice and generic guidance, aiming to make it easier for firms to give consumers more useful help with pensions and investments.
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 way an investment portfolio is divided between different asset classes — such as shares, bonds and cash — to balance expected return against the level of risk an investor is prepared to accept.
The legal requirement for UK employers to enrol eligible workers into a workplace pension.
The £10,000-a-year earnings level at which an eligible employee must be automatically enrolled into a workplace pension by their employer.
A simple trust where the beneficiary has an absolute right to the capital and income, often used to hold assets for a child.
Selling shares in a taxable account and immediately repurchasing them inside an ISA to shelter future gains and dividends.
Selling investments and repurchasing them inside an ISA to shelter future gains, while using the annual CGT exempt amount.
A CGT planning technique where one spouse sells an asset to crystallise a gain or loss and the other repurchases it at market value, effectively doubling the use of CGT annual exempt amounts.
The specific trigger points -- such as taking tax-free cash, starting drawdown, buying an annuity, reaching age 75, or dying -- at which a pension scheme tests the value being taken against the member's Lump Sum Allowance and Lump Sum and Death Benefit Allowance.
An investment strategy of holding bonds or fixed-term savings products with staggered maturity dates, so that a portion of the portfolio matures and can be reinvested at regular intervals.
A temporary uplift paid by some defined benefit pension schemes between early retirement and State Pension age, designed to level out total retirement income by paying more before the State Pension starts and less after.
A closed form of pension income drawdown that limits annual withdrawals to a capped maximum, only available to those already in it before April 2015.
A rule letting you use unused pension annual allowance from the previous three tax years to make a larger contribution this year.
A rule allowing unused pension annual allowance from the previous three tax years to be added to the current year's £60,000 allowance, letting a high earner or windfall recipient make a larger tax-relieved contribution in one go.
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.
A savings account where all interest earned is entirely free of Income Tax, forming part of the overall £20,000 annual ISA allowance for 2026/27.
The taxable gain arising on an investment bond — for example on full surrender or death — with top-slicing relief available.
A taxable profit arising on certain life insurance policies and investment bonds, taxed as income rather than as a capital gain.
A tax-free long-term savings account set up for UK children born between 1 September 2002 and 2 January 2011, now closed to new accounts and largely superseded by Junior ISAs, maturing when the child turns 18.
A pension scheme type (launched in the UK from 2023) where contributions go into a shared fund. Members receive a target income in retirement, but this is not guaranteed — it can go up or down depending on investment returns.
A type of pension scheme, also called Collective Defined Contribution, that pools members' contributions and investment risk to target (but not guarantee) a stable retirement income.
The smoothed, constant annual rate of return that would take an investment from its starting value to its ending value over a period, ignoring the actual bumps and dips along the way.
Interest earned on both your original money and the interest already added to it.
A lump-sum life insurance benefit, usually a multiple of salary, paid tax-free to an employee's beneficiaries if they die while employed, typically provided through a registered group life scheme.
The route a pension saver follows to turn their accumulated pot into a retirement income, spanning choices like drawdown, annuities, lump sums and any combination of these.
An annuity contract purchased now but with income payments beginning at a specified future date.
The mandatory, FCA-regulated financial advice that a member of a defined benefit pension scheme must obtain before transferring benefits worth 30,000 pounds or more to a defined contribution scheme.
Moving the value of a defined benefit (final salary) pension into a defined contribution scheme by taking a cash-equivalent transfer value.
A pension where the eventual retirement income depends on how much has been paid in and how well it has been invested, rather than being based on salary and years of service, as with a defined benefit scheme.
An IHT planning trust where you give away a lump sum but retain fixed regular withdrawals, with only the discounted value counting as a chargeable transfer.
A ratio showing how many times over a company's earnings could pay its declared dividend, used to assess whether a dividend payment is sustainable or at risk of being cut.
An investment strategy focused on holding shares in companies with a long track record of consistently increasing their dividend per share each year, rather than simply targeting the highest current dividend yield.
Using cash dividends paid by shares or funds to buy more units automatically, rather than taking the income as cash.
A scheme where cash dividends from shares are automatically used to purchase additional shares in the same company at the market price, reinvesting income for compound growth -- though the dividend income remains taxable in the year received.
The annual dividend a share pays, expressed as a percentage of its current share price, used to compare the income return offered by different dividend-paying shares or funds.
A savings account that allows withdrawals at any time without notice or penalty, usually paying a lower or more variable interest rate than fixed-rate or notice accounts in exchange for that flexibility.
Tax relief for investors in qualifying small unquoted trading companies — 30% Income Tax relief plus CGT perks.
A 30% income tax relief available to UK investors who subscribe for shares in qualifying EIS companies, up to GBP 1 million per tax year.
Easy-access savings covering 3 to 6 months of essential spending for unexpected events.
A type of pension annuity paying a higher guaranteed income because the holder's health or lifestyle suggests a shorter-than-average life expectancy.
Pre-2006 HMRC protection that fixes a pension fund value at April 2006, shielding it from Lifetime Allowance charges.
A tax relief scheme that gives investors 30% Income Tax relief and CGT deferral in exchange for investing in small UK companies.
A return of capital on accumulation fund units bought mid-year, preventing the new investor from being overtaxed on income already accrued.
Equalisation is the capital element of a fund's first distribution to new investors, representing income that accrued before they bought in, so it isn't taxable.
A pension annuity whose income rises each year, either by a fixed percentage or in line with inflation, to protect spending power over time.
A type of defined benefit pension that pays a guaranteed retirement income based on a member's salary shortly before retirement or leaving, multiplied by years of pensionable service.
The portfolio size at which 4% a year covers your spending, marking financial independence.
A form of HMRC pension protection that locks in a higher lifetime allowance figure (now the Lump Sum Allowance) from a past date, in exchange for stopping further pension contributions and accrual.
A form of protection that lets individuals keep a higher, fixed tax-free pension lump sum threshold from when the Lifetime Allowance was reduced or abolished, provided they stop or limit further contributions.
A savings account that pays a guaranteed fixed interest rate for a set term, usually one to five years, in exchange for locking the money away without access until maturity.
A savings account that pays a guaranteed fixed interest rate for a set term, usually with no access to your money until maturity.
A pension income option where funds remain invested and you take variable income as needed -- triggering the £10,000 Money Purchase Annual Allowance on further contributions.
A type of ISA that allows you to withdraw money and re-subscribe the same amount in the same tax year without it counting against your annual £20,000 ISA allowance.
Financial Services Compensation Scheme — UK savings protection up to £85,000.
The Financial Services Compensation Scheme protection covering up to GBP 85,000 per person per authorised institution if a UK bank, building society or credit union fails.
The charge an investment platform levies for holding and administering your funds, shares or ISA, usually a yearly percentage of your portfolio.
An online investment platform that lets you buy, hold and switch between funds from many providers in one account, often within an ISA or pension wrapper.
The average difference in pension savings and retirement income between men and women, driven by lower average pay, more career breaks and part-time work, and correspondingly lower average pension contributions over women's working lives.
A taxable investment account with no annual contribution limit, used once tax-free allowances such as ISAs and pensions are exhausted.
A UK government bond that has been split ("stripped") into its individual coupon and principal payments, each tradeable separately as its own zero-coupon security with a single payment at a fixed future date.
The UK tax treatment of government bonds (gilts), under which any capital gain on disposal is exempt from Capital Gains Tax, while interest ("coupon") payments are taxable as savings income.
A small additional State Pension amount some people who paid National Insurance between 1961 and 1975 still receive, based on graduated NI contributions paid under a since-abolished earnings-related scheme.
A collection of individual personal pension contracts arranged by an employer with a single pension provider, used by many employers to meet their auto-enrolment duties.
A contractual promise, built into some older pension policies, to convert the pension pot into an annuity income at a fixed, pre-agreed rate that is often far more generous than rates available on the open market today.
A proposed default option that would automatically point pension savers who have not made an active choice towards a suitable way of drawing an income in retirement.
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.
A high-interest current account pays a competitive rate of credit interest on your everyday balance, usually up to a capped amount and subject to conditions.
Higher and additional rate taxpayers can reclaim an extra 20% or 25% pension tax relief via Self Assessment.
A now-replaced scheme that protected the State Pension of parents and carers between 1978 and 2010 by reducing the number of qualifying years needed, later replaced by National Insurance credits.
Moving an investment asset directly between accounts, such as from a pension to an ISA or between two pension providers, without selling it for cash first.
A class of fund units that pay out any dividends or interest earned to the investor as cash, rather than reinvesting it.
A UK government bond whose interest payments and redemption value rise in line with inflation (referenced to the RPI), used by investors seeking a return that tracks the cost of living rather than a fixed cash amount.
A form of HMRC pension protection based on the value of an individual's pension savings at a past date, which -- unlike fixed protection -- still allows further pension contributions to be made.
A form of pension protection that fixes an individual's tax-free lump sum entitlement based on the actual value of their pension savings at the time a Lifetime Allowance cut took effect, without requiring contributions to stop.
A type of ISA that allows peer-to-peer loans and certain debt-based crowdfunding investments to be held tax-free, sharing the overall 20,000 pounds annual ISA allowance with Cash and Stocks and Shares ISAs.
A closed-ended, publicly listed company that pools investors' money to buy a portfolio of assets, with its own share price that can trade above or below the value of its underlying holdings.
Individual Savings Account — a tax-free wrapper for cash savings or investments.
A one-off extra ISA allowance given to a surviving spouse or civil partner equal to the value of their deceased partner's ISA, on top of their own.
A pension annuity that keeps paying an income to a surviving spouse or partner after the main holder dies, rather than ending on the first death.
A tax-free savings or investment account for under-18s, with its own separate £9,000 annual allowance for 2026/27, which the child gains full control of at 18.
The £9,000 maximum annual subscription into a Junior ISA for a child under 18 in 2026/27.
A self-invested personal pension for a child, letting a parent or guardian build retirement savings with tax relief until the child can access it.
A qualifying EIS company with enhanced investment limits (GBP 2,000,000/year for investors, GBP 20M total raise) meeting R&D intensity or workforce criteria.
An annuity that pays a fixed income for life that never changes, so the amount stays the same every year regardless of inflation.
An ISA for first homes or retirement with a 25% government bonus on contributions.
A 25% government charge on Lifetime ISA money withdrawn for reasons other than a first home or retirement.
A voluntary employer accreditation requiring pension contributions above the auto-enrolment minimum to deliver adequate retirement income.
An FCA-authorised UK fund structure designed to let investors, including through pensions, hold illiquid assets like infrastructure, private equity and property more easily.
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.
An exit penalty an insurer can apply to a with-profits policy if it is cashed in before the end of its term during a period when investment markets have performed poorly, to protect the interests of other policyholders remaining in the fund.
Government-driven consolidation of smaller UK defined contribution pension schemes and local government pension pools into a much smaller number of very large "megafunds" managing tens of billions of pounds each.
A savings account offering competitive interest with limited access, often linked to short-term money market investments.
A reduced Annual Allowance of £10,000 that applies once you have flexibly accessed a defined contribution pension.
A pension where contributions are invested to build a pot whose final value depends on contributions and investment returns, not a guaranteed salary-based formula.
Reduced £10k pension allowance after flexibly accessing a pension.
A government-backed savings organisation, offering products such as Premium Bonds and fixed-rate savings, where deposits are 100% protected because they are backed directly by HM Treasury.
Fixed-term savings products issued by NS&I where the return is entirely tax-free, historically including Index-linked Certificates tracking inflation, though new issues are currently unavailable to the general public.
Living off the dividends and interest a portfolio produces without selling the underlying capital.
Workplace pension method where contributions come out of gross pay before income tax is calculated.
The earnings cap used to determine maximum pension tax relief. You can only receive pension tax relief on contributions up to 100% of your Net Relevant Earnings in a tax year, or £3,600 gross (whichever is higher), even if you have unused Annual Allowance.
An investment holding arrangement where shares or funds are legally registered in the name of a nominee company (typically the broker or platform) on behalf of the underlying beneficial owner, who retains full economic ownership and tax liability.
The earliest age at which most people can access their private pension savings without an unauthorised payment tax charge, rising from 55 to 57 from 6 April 2028.
A savings account that pays a higher rate in exchange for giving a set notice period - often 30, 60 or 90 days - before you can withdraw money.
Income retained within an accumulation fund that is still taxed as if it had been paid out to investors, even though no cash is received.
A pooled UK investment fund structured as a company that issues shares, expanding or contracting as investors buy in or sell out.
A life assurance investment wrapper issued outside the UK where growth rolls up gross, with UK tax deferred until a chargeable event occurs.
A standardised annual percentage showing the total ongoing cost of holding a fund, including the manager's fee and other routine running costs, but not one-off trading or platform charges.
A UK life-insurance-based investment where the fund pays corporation tax internally, giving the investor a 20% notional tax credit against further Income Tax.
A UK collective investment fund structured as a company rather than a trust, whose share price is based directly on the value of its underlying assets, with shares created and cancelled as money flows in and out.
A 25% tax charge on transfers of UK pension savings to a Qualifying Recognised Overseas Pension Scheme (QROPS), unless a specific exemption applies, such as both the member and the scheme being based in the same country or within the EEA.
Withdrawing a portion of an investment bond, triggering a potential chargeable gain for income tax purposes if the cumulative surrender exceeds the 5% annual allowance.
An investment where individuals lend money directly to borrowers through an online platform in return for interest, bypassing traditional banks.
Max £60,000 you can contribute to pensions per year with tax relief.
A pension lump sum, taxed as income rather than tax-free, paid where a scheme member is entitled to a cash sum that would otherwise have qualified as tax-free cash but exceeds their available Lump Sum Allowance.
The tax-free lump sum, usually up to 25% of a pension pot, that you can take when you start drawing benefits.
Giving up part of a regular pension income in exchange for a cash lump sum, usually the tax-free lump sum taken at retirement.
An extra Pension Credit payment rewarding people who reached State Pension age before 6 April 2016 for having modest retirement savings or income.
A lump sum paid from an uncrystallised pension fund to nominated beneficiaries when the member dies, with favourable tax treatment if the member was under age 75.
Keeping a pension invested and withdrawing flexibly in retirement.
An excessive income tax charge applied to the first flexible pension withdrawal in a tax year, arising because the provider taxes the payment as if it will recur monthly (multiplied by 12) rather than treating it as a one-off lump sum.
Reforms introduced in April 2015 that removed the requirement to buy an annuity, giving people aged 55 and over far greater flexibility in how they access and use defined contribution pension savings.
The period over which pension contributions and growth are measured against the Annual Allowance, now aligned with the tax year for all pension schemes following reforms that removed scheme-specific input periods.
A way of dealing with pensions on divorce where one spouse keeps their pension and the other keeps a larger share of other assets (e.g. the family home) instead.
A statutory lifeboat fund compensating members of defined benefit pension schemes whose employer has become insolvent.
HMRC anti-avoidance rules that can strip the tax-free status from a pension commencement lump sum where it is used to significantly increase pension contributions in a pre-planned way, triggering an unauthorised payment charge.
An HMRC anti-avoidance rule that can trigger an unauthorised payment tax charge when someone takes a tax-free pension lump sum and uses it to significantly increase pension contributions, in a pre-planned way, to generate extra tax relief.
UK legislation extending Collective Defined Contribution schemes to multiple employers, requiring consolidation of small pension pots, and pushing large-scale DC pension consolidation into fewer, bigger "megafunds".
Government top-up on pension contributions that refunds the Income Tax you paid on the money.
A government-backed online service, being rolled out in stages, that will let people see all their pensions -- including the State Pension -- securely in one place.
A defined contribution pension arranged individually with a provider, rather than through an employer, that anyone (employed, self-employed or not working) can pay into and receives tax relief on.
An offshore life-insurance bond where the policyholder can select the underlying personal assets, which triggers a punitive annual UK tax charge.
A tax-free allowance for savings interest worth £1,000, £500 or £0 depending on your tax band.
A strategy where segments of a pension are crystallised gradually over time, each triggering their own 25% tax-free cash, to optimise income levels and marginal tax rates.
A strategy of partially crystallising a pension pot over time, taking 25% tax-free cash and moving funds into drawdown in stages, to manage marginal tax rates in retirement.
A pension strategy of gradually drawing down pension benefits over time rather than taking the entire fund in one go, allowing the remainder to continue growing tax-free.
The Private Intermittent Securities and Capital Exchange System — a new UK trading venue letting private companies allow existing shareholders and investors to trade shares periodically without a full stock market listing.
Periodically buying or selling holdings within an investment portfolio to bring the mix of assets back to its original target allocation after market movements have shifted it.
A discussed pension reform idea that would let employees nominate a single existing pension pot to follow them between jobs, rather than accumulating a new workplace pension each time they change employer.
Investing a fixed amount at regular intervals rather than a lump sum, so more units are bought when prices are low and fewer when prices are high, smoothing the average purchase price over time.
A UK savings product from NS&I where instead of interest, bondholders enter a monthly prize draw offering tax-free prizes from GBP 25 to GBP 1 million.
An NS&I savings product where you win tax-free prizes in a monthly draw instead of earning interest.
A right some pension scheme members hold to take a tax-free lump sum greater than the standard 25%, or greater than the current cash limit, based on rules that applied before the Lifetime Allowance was abolished.
An offshore pension arrangement that can sit outside a UK estate for Inheritance Tax purposes, used mainly by wealthy individuals with international connections or non-UK domicile.
An overseas pension scheme meeting HMRC standards, allowing UK pension funds to be transferred abroad without an unauthorised payment charge, though a 25% Overseas Transfer Charge may apply if conditions are not met.
A category of corporate loan stock, including most conventional company and government bonds, that is exempt from Capital Gains Tax on disposal, though any gain or loss is also generally ignored for tax purposes.
A life-insurance policy meeting HMRC conditions so that its proceeds are normally free of further income tax in the policyholder's hands.
An overseas pension scheme that meets HMRC conditions, allowing UK pension benefits to be transferred abroad without an unauthorised payment charge.
An overseas pension scheme that meets HMRC criteria to accept transfers of UK registered pension savings.
A listed company that owns and manages income-producing property and, in exchange for meeting strict conditions including distributing at least 90% of rental profits to shareholders, pays no Corporation Tax on its property rental business.
A savings account that pays a higher rate of interest in exchange for committing to pay in a fixed amount (up to a set monthly cap) each month, usually over a 12-month term.
A savings account that pays a higher interest rate in return for you paying in a fixed amount each month for a set term.
Pension method where contributions come from net pay and the provider claims 20% tax relief from HMRC.
An offer giving existing shareholders the right to buy new shares in a company, usually at a discount to the market price and in proportion to their existing holding, to raise fresh capital.
An online investment service that builds and manages a portfolio for a client automatically, based on their answers to a risk questionnaire, usually for a lower fee than a human financial adviser.
CGT rule matching share sales first against same-day purchases of identical shares.
An HMRC-approved, tax-advantaged employee share scheme letting staff save monthly to buy company shares at a fixed, discounted option price.
HMRC-approved tax-advantaged share scheme letting employees buy shares at a discounted price after 3 or 5 years of saving.
A dividend paid in the form of new shares instead of cash, giving shareholders the choice to increase their shareholding rather than receive a cash payment.
Aggregated holding of identical shares used for CGT cost-basis calculation under HMRC rules.
A government scheme offering 50% income tax relief on investments up to £200,000 per tax year in qualifying early-stage UK companies.
Generous tax relief for backing very early-stage startups — 50% Income Tax relief on up to £200,000/year.
A pension lump sum paid to someone with a terminal illness and a life expectancy of less than 12 months, normally tax-free up to the Lump Sum and Death Benefit Allowance.
A corporate action in which a company repurchases its own shares from shareholders, reducing the number of shares in issue and typically increasing earnings per share and the value of remaining shares.
Savings accounts run on Islamic finance principles that pay an expected profit rate instead of interest, which is prohibited under Sharia law.
Self-Invested Personal Pension — a personal pension you control.
A rule letting you withdraw a small pension pot in full as a lump sum, with 25% tax-free and the rest taxed as income.
An HMRC rule letting you cash in small pension pots in full without affecting your wider pension allowances.
An occupational defined contribution pension scheme, typically set up by directors of a small or family-owned company, giving members greater control over investment choices, including the ability to lend to the sponsoring employer or buy commercial property.
A simple, low-cost personal pension that must meet government standards on capped charges, low minimum contributions and flexible payments.
A 0% tax band of up to £5,000 for savings interest, which shrinks pound-for-pound as your other (non-savings) income rises above the Personal Allowance.
A regular government payment in retirement based on your National Insurance record.
Choosing to delay claiming the State Pension past State Pension age in exchange for a permanently higher weekly amount once it is eventually claimed.
A corporate action in which a company divides its existing shares into multiple new shares, reducing the price per share proportionally without changing the total value of a shareholder's holding.
An investment account holding shares, funds, bonds or investment trusts, where all growth and income is entirely free of Income Tax and Capital Gains Tax, within the £20,000 annual ISA allowance.
A savings product that protects the original capital deposited while linking any additional return to the performance of a stock market index, in exchange for giving up a guaranteed fixed interest rate.
Reduced pension Annual Allowance for high earners — tapers down from £60,000 to a £10,000 floor.
A new lighter-touch category of pension and investment help, sitting between full regulated financial advice and generic guidance, that firms can give without a full advice suitability process.
Income measure used to test whether the £200,000 pension tapering trigger applies.
Buying additional qualifying years via voluntary Class 3 NI contributions (£956.80 per year in 2026/27) to increase your State Pension entitlement.
A passively managed investment fund that aims to replicate the performance of a specific market index, such as the FTSE 100 or S&P 500, rather than trying to pick individual investments to beat it.
The guarantee that the UK State Pension rises each April by the highest of earnings growth, CPI inflation, or 2.5% -- protecting pensioners against below-inflation or below-earnings increases.
A rule allowing small pension pots (total pension wealth up to £30,000, or individual DC pots up to £10,000) to be paid as a lump sum from age 55.
A pension withdrawal where 25% is tax-free and 75% is taxed as income, taken without entering drawdown.
A lump sum taken straight from an uncrystallised pension pot where 25% is tax-free and 75% is taxable.
A pooled investment structured as a trust, where investors buy units and a fund manager invests the combined money across many assets.
An investment fund, common in pensions and life policies, where your money buys units whose value rises and falls with the underlying assets.
A joint FCA, TPR and DWP framework requiring workplace defined contribution pension schemes to be assessed and compared on investment performance, costs and service, not price alone.
A listed fund investing in small companies that offers 30% Income Tax relief and tax-free dividends.
A tax-advantaged investment company listed on the London Stock Exchange that invests in small UK companies. Investors get 30% Income Tax relief on up to £200,000 per year, and dividends are tax-free.
Informal term for selling and repurchasing the same asset to crystallise a CGT loss — restricted in the UK.
A pooled investment fund, common in older pensions and endowment policies, that smooths returns over time using annual and final bonuses rather than passing on market movements directly.
The total annualised return an investor can expect from a bond if they hold it until it matures and reinvest all coupon payments, taking into account its current price, coupon rate and time to maturity.
VAT obligations for sellers using Fulfilment by Amazon, which can trigger UK or EU VAT registration even below the usual turnover threshold once stock is stored in a given country.
The accounting process of spreading the cost of an intangible asset over its useful economic life, similar to depreciation but applied to non-physical assets such as patents, goodwill and software licences.
A capital allowance giving 100% same-year tax relief on qualifying plant and machinery up to GBP 1 million.
A capital allowance allowing UK businesses to deduct up to GBP 1 million of qualifying plant and machinery expenditure from taxable profits in the year of purchase.
A capital allowance giving businesses 100% tax relief in the year of purchase on qualifying plant and machinery expenditure up to an annual limit of 1 million pounds, allowing the full cost to be deducted from taxable profits immediately.
A payroll charge of 0.5% on the annual pay bill of larger employers, used to fund apprenticeship training.
The constitutional document of a UK limited company that governs its internal management, including shareholder rights, director powers, share transfer rules and dividend policies.
Funding that lets a business acquire or use equipment, vehicles or machinery by spreading the cost over time rather than paying upfront.
Two companies are associated if one controls the other or both are under common control, which reduces the Corporation Tax profit thresholds proportionally.
For corporation tax, companies are associated if one controls the other or both are under common control. The GBP 50,000 and GBP 250,000 profit thresholds are divided equally between associated companies.
An additional Corporation Tax rate of 3% applied to the profits of banking companies and building societies above a GBP 100 million threshold, from April 2023.
The change from 6 April 2024 that taxes self-employed sole traders on profits arising in the tax year, not their accounting period.
A UK government-guaranteed emergency loan scheme that let small businesses borrow up to £50,000 quickly during the coronavirus pandemic, with the government covering 100% of the lender's risk if the loan defaulted.
A provision in a lease letting the landlord or tenant end the tenancy early on a specified date, subject to conditions such as giving written notice and the property being in good repair.
A calculation that identifies the sales volume at which total revenue exactly equals total costs, helping businesses determine the minimum output needed to avoid a loss.
A Capital Gains Tax relief that lets you defer the gain on a business asset by reinvesting the proceeds into a replacement qualifying business asset.
Cover that replaces lost profit and pays ongoing fixed costs when a business cannot trade normally after an insured event, such as fire or flood damage to its premises.
HMRC facility allowing businesses and individuals to spread tax payments over time when facing financial difficulty.
Business Property Relief reduces the value of qualifying business assets for Inheritance Tax, cutting the taxable amount by 100% or 50%.
A property tax paid by occupiers of most non-domestic properties in England, Scotland and Wales, calculated from a property's rateable value multiplied by a government-set multiplier.
A VAT mechanism that adjusts the input tax recovered on certain high-value assets over several years as their use changes.
A simplified accounting method for small businesses that records income when received and expenses when paid, rather than when they are earned or incurred.
A projection of the cash expected to flow into and out of a business over a future period, used to identify funding gaps before they occur rather than relying on profit alone.
The tax rules that apply when a sole trader or partnership permanently stops trading, including how the final period of profit is taxed and how any remaining overlap relief or terminal losses are used.
A monthly document a CIS contractor must provide to each subcontractor, showing the gross payment, the tax deduction made (20% or 30%), and the net amount paid, enabling the subcontractor to offset deductions against their own tax liability.
A HMRC status allowing CIS subcontractors to receive full payments without the 20% standard deduction, with the obligation to pay their own tax via Self Assessment.
National Insurance paid by self-employed people on profits above the lower threshold, at 6% then 2%.
A UK company controlled by 5 or fewer participators, or any number of directors. Most owner-managed companies are close companies, triggering additional rules on director loans, benefits in kind, and the S455 charge at 35.75%.
The UK's registrar of companies, an executive agency of government that incorporates limited companies, LLPs and other legal entities and maintains their public statutory records.
A tax-advantaged discretionary share option scheme allowing companies to grant options over shares worth up to 60,000 pounds per employee, with no Income Tax or National Insurance due on exercise provided the option is held for at least three years.
A formal, legally binding agreement between an insolvent company and its creditors to repay some or all of its debts over an agreed period, allowing the company to keep trading.
An annual Companies House filing in which a UK limited company confirms its key registered details are correct, replacing the former Annual Return.
HMRC's scheme requiring contractors to deduct tax from payments to subcontractors in the construction industry at 20%, 30%, or 0%.
UK tax rules that can charge Corporation Tax on the profits of an overseas subsidiary if those profits have been artificially diverted away from the UK parent company.
A short-term loan to a company that can convert into equity shares at a later funding round, rather than being repaid in cash.
The UK government wage subsidy scheme (March 2020 to September 2021) that paid up to 80% of a furloughed employee's wages, up to GBP 2,500 a month, to keep them employed during the pandemic.
UK tax on company profits — 19% small profits rate, 25% main rate for 2026/27.
A group of UK Corporation Tax reliefs that lets qualifying creative companies claim extra deductions or payable credits on eligible production costs.
The average number of days a business takes to pay its own suppliers, calculated from trade payables and annual purchases, used alongside debtor days to assess working capital efficiency.
A legal agreement between business co-owners, usually alongside life insurance, giving each the option to buy a deceased co-owner's shares from their estate, and giving the estate the option to sell them.
Raising money from a large number of people online, typically in exchange for rewards, equity, debt repayment, or as donations.
A criminal record check carried out by the Disclosure and Barring Service, commonly required before starting certain jobs, particularly those involving children or vulnerable adults.
The average number of days a business takes to collect payment from its customers after issuing an invoice, used to measure how efficiently it converts sales into cash.
A statutory relief allowing a company to distribute a subsidiary to its shareholders without triggering income tax or CGT, if qualifying conditions are met.
Claims a commercial landlord can bring against a tenant at the end of a lease for breaches of repair, redecoration or reinstatement obligations set out in the lease.
A record of money a director borrows from or lends to their own limited company that does not constitute salary, dividends, or reimbursed expenses.
A former relief allowing a company to transfer business assets to shareholders at no immediate tax cost when reverting to sole trader status.
A UK tax charged at a rate above the main Corporation Tax rate on profits that large multinational groups have artificially diverted away from the UK.
The decision of how a company director takes income, balancing salary, employer NI and dividend tax.
A VAT anti-fraud measure in construction where the customer, not the supplier, accounts for VAT on qualifying services from March 2021.
A limited company registered at Companies House that has had no significant accounting transactions during a financial year, allowing it to file simplified dormant accounts and, in some cases, no Corporation Tax return.
The VAT rules that apply to UK dropshipping businesses, which usually must register once turnover passes £90,000 and may face import VAT depending on where suppliers and customers are based.
Earnings Before Interest, Tax, Depreciation and Amortisation — a measure of a company's underlying operating profitability before financing structure, tax jurisdiction and accounting policy choices are factored in.
An annual charge on UK businesses regulated for anti-money laundering purposes, banded by their UK revenue, that helps fund government action against economic crime such as money laundering and fraud.
A trust that holds a controlling stake in a company for the benefit of its employees, enabling 0% CGT on the sale by qualifying shareholders.
Legally mandatory insurance covering employers against claims from employees injured or made ill as a result of their work, with a minimum cover requirement of £5 million.
A £10,500 annual reduction in employer National Insurance for eligible businesses in 2026/27.
A GBP 10,500 annual reduction in employer National Insurance (2026/27), claimed through RTI payroll software. Most businesses and charities qualify, but single-director companies with no other employees do not.
A £10,500 annual reduction in employer Class 1 NI liability available to eligible smaller employers.
A statement from a current or former employer about an individual's employment, which employers can generally choose whether to give and, if given, must ensure is true, accurate and fair.
A tax-advantaged share option scheme for smaller UK companies that lets qualifying employees acquire shares at a fixed price with significant Income Tax, National Insurance, and Capital Gains Tax advantages.
A unique Economic Operators Registration and Identification number businesses need to move goods into or out of the UK.
A finance arrangement where a business rents equipment for regular payments instead of buying it outright, spreading the cost over time.
A death-in-service life insurance policy structured under a discretionary trust outside the standard registered group life scheme, keeping payouts free of the Lump Sum and Death Benefit Allowance limits and inheritance tax.
Goods and services on which no VAT is charged at all, such as most financial services, insurance, health and education, distinct from zero-rated supplies which are still technically taxable.
A private limited company used to hold and grow family wealth, allowing investment growth to accrue to children and grandchildren outside the founders' estates.
A simplified VAT scheme where you pay HMRC a fixed sector percentage of gross turnover instead of tracking input VAT.
Businesses spending less than 2% of turnover on goods pay a flat 16.5% VAT rate, limiting flat rate scheme benefits.
A designated UK special economic zone offering tax incentives — including 100% first-year capital allowances, enhanced Structures and Buildings Allowance, and employer NI relief — to attract business investment.
A UK corporation tax incentive (from April 2023) allowing companies to deduct 100% of the cost of qualifying plant and machinery in the year of purchase, with no cap.
A legal duty on larger UK employers to publish the difference in average pay between their male and female employees each year.
A business structure where two or more people share ownership, profits and unlimited personal liability for the business's debts, without forming a separate company.
A mechanism allowing trading losses and other reliefs to be surrendered between companies in a 75% group to reduce the group's overall tax bill.
A written summary of the key commercial terms agreed in principle for a property or business deal, such as a commercial lease, before solicitors draft the formal legal contract.
A separate company established to receive payments for the commercial use of an individual's image, likeness, or personal brand, typically used by high-profile athletes, entertainers, and influencers.
A licensed professional authorised to administer formal insolvency procedures for individuals and companies in the UK.
A form of business borrowing where a company raises cash against the value of its unpaid customer invoices.
Tax rules to ensure contractors working like employees pay similar tax to employees.
The unlawful practice of an end client applying a single IR35 status decision to an entire group of contractors without individually assessing each engagement, which the off-payroll working rules explicitly prohibit.
A life or income protection policy taken out by a business on an employee whose loss would cause significant financial harm, with the company as beneficiary.
A business structure that is a separate legal entity from its owners, with its own finances and legal liability, most commonly a private company limited by shares.
A VAT Flat Rate Scheme classification for low-spending businesses, requiring them to use a higher fixed flat rate of 16.5 per cent.
A business structure combining partnership-style profit sharing and tax treatment with limited liability, widely used by professional firms such as solicitors and accountants.
A partnership structure with at least one general partner who has unlimited liability and manages the business, and one or more limited partners whose liability is capped at their investment and who take no part in management.
Profits allocated to a Limited Liability Partnership member, which are taxed as self-employment income and reported via Self Assessment rather than as a salary.
The 18% writing-down allowance pool for most business plant and machinery expenditure not in a special rate pool.
HMRC's digital reporting system — quarterly updates using approved software.
HMRC's requirement for many sole traders and landlords to keep digital records and submit quarterly updates.
Anti-avoidance rules that tax income from a Managed Service Company as employment income where a third-party provider, rather than the worker, effectively controls the company.
A formal process to wind up a solvent company, with distributions to shareholders treated as capital (CGT) rather than income.
A business funding product repaid as a fixed percentage of future card sales rather than fixed monthly instalments.
A simplified set of annual accounts for the smallest UK companies, requiring only a basic balance sheet at Companies House with no requirement to file a profit and loss account.
A form of organised tax fraud where temporary workers are split across hundreds or thousands of small shell companies to fraudulently multiply small-business VAT and Employment Allowance reliefs.
A partnership with both individual and non-individual members (typically a company), used to allocate profits and sometimes challenged by HMRC anti-avoidance rules.
The percentage of revenue left as profit after every business cost, including interest and tax, has been deducted — a key measure of overall profitability used to compare businesses of different sizes.
The rules that make a client responsible for deciding the employment status of a contractor working through their own company.
Tax legislation determining whether a contractor working through their own limited company should be taxed as an employee for that engagement; for medium/large private-sector clients, the client (not the contractor) decides status and, if inside IR35, deducts PAYE and NIC.
An EU VAT scheme letting a business report and pay VAT on cross-border sales to EU consumers through a single registration rather than registering in each member state.
An election to charge VAT on an otherwise exempt supply of land or commercial property, allowing input VAT recovery on associated costs.
Relief for profits that were taxed twice under the old current year basis rules for sole traders and partnerships with a non-April accounting year-end, usable on a change of accounting date or on cessation of trade.
A UK tax regime applying a reduced 10% Corporation Tax rate to profits earned from patented inventions and certain qualifying IP.
An individual who holds significant ownership or control over a UK company and must be registered on the public PSC register at Companies House.
An employee incentive arrangement that pays a cash bonus linked to the value or growth in value of company shares, without the employee ever actually holding or owning any real shares.
A new company set up to carry on the trade of a failed company, often using a similar name and the same directors, after the original company has entered insolvent liquidation.
A scheme available since 1 January 2021 allowing VAT-registered UK importers to account for import VAT on their VAT return instead of paying it at the border.
An insolvency process in which the sale of an insolvent company's business and assets is negotiated and agreed before an administrator is formally appointed, then completed immediately afterwards.
A creditor whose claims are paid ahead of floating-charge holders and ordinary unsecured creditors when a company or individual becomes insolvent.
Cover for the cost of claims that a business gave negligent advice, made a mistake in its professional work, or breached client confidentiality, causing a client financial loss.
Compensation of up to 90 days' full pay per employee awarded by an Employment Tribunal where an employer fails to properly consult before 20 or more redundancies at one establishment within 90 days, as required by collective redundancy law.
Cover that pays compensation and legal costs if a business is found responsible for injury to a member of the public, or damage to their property, arising from its business activities.
A donation a limited company makes to charity that can be deducted from its taxable profits before Corporation Tax is calculated, reducing the company's tax bill rather than the individual's.
A Corporation Tax incentive that rewards UK companies for qualifying research and development spending.
An employer-funded term life policy held in trust for an employee's family, providing tax-efficient death benefit outside the pension annual allowance.
A term in a commercial lease setting out when and how the rent will be reassessed during the tenancy, most commonly upward-only reviews to the open market rent every few years.
A Corporation Tax incentive rewarding companies that spend on qualifying scientific or technological innovation.
A 13% above-the-line tax credit for large companies and some SMEs on qualifying R&D expenditure, introduced as part of the post-2023 R&D reforms.
A contractual clause limiting what a departing employee can do after leaving, such as working for a competitor, poaching clients or staff, or using confidential information, enforceable only to the extent reasonably necessary to protect a legitimate business interest.
A contract term allowing a supplier to retain legal ownership of goods until the buyer pays for them in full, giving the supplier priority over other creditors if the buyer becomes insolvent.
A legally required check an employer must carry out before employing someone, to confirm they are permitted to work in the UK and to establish a statutory excuse against a civil penalty.
Tax rules that treat an LLP member as an employee for tax purposes (Income Tax and NI via PAYE) unless they fail at least one of three statutory conditions on profit-sharing, influence and capital.
The decision facing owner-directors of a personal company on how to extract profit -- as salary (deductible for Corporation Tax but subject to Income Tax and NI) or as dividends (not deductible but taxed more lightly on the individual).
A tax-advantaged savings-related share option scheme that lets employees save a fixed monthly amount over three or five years and use the savings to buy company shares at a discounted, fixed price.
A temporary 35.75% corporation tax charge on an overdrawn director's loan account not repaid within nine months of the year end.
Income Tax plus Class 4 National Insurance charged on a sole trader profits through Self Assessment.
Anti-avoidance rules (the "settlor-interested" rules behind the Arctic Systems case) that can tax income diverted to a spouse or family member back on the person who originally provided the capital or income.
Life insurance taken out by business co-owners so that, if one dies, the surviving shareholders have funds to buy their shares from the family, keeping control within the business.
A set of flat-rate deductions that let sole traders and partnerships claim certain business costs without working out actual amounts.
The simplest legal structure for running a business, where one individual owns and runs the business personally and has unlimited personal liability for its debts.
The 6% writing-down allowance pool for integral features, thermal insulation, and long-life assets.
An employer-sponsored occupational pension scheme run by company directors, offering wide investment powers including loans back to the business.
A 3% per year straight-line capital allowance on qualifying expenditure on new commercial structures and buildings.
A capital allowance giving businesses tax relief at 3% per year on a straight-line basis for the cost of constructing or renovating non-residential structures and buildings, covering costs not eligible for other capital allowances.
A CGT exemption allowing companies to sell shares in another company tax-free if they have held at least 10% for 12 months.
A now-expired UK capital allowance that let companies deduct 130% of qualifying plant and machinery costs from their taxable profits.
A special VAT scheme where travel businesses account for VAT only on their profit margin, not the full price of bought-in travel services.
Tax-free £1,000 a year of gross self-employed or casual «side hustle» income.
Profits from a self-employed trade, profession or vocation assessed under Income Tax and subject to Class 4 National Insurance Contributions.
The set of reliefs allowing a sole trader or partner who makes a loss in their business to offset it against other income or gains, carry it back against earlier profits, or carry it forward against future profits from the same trade.
A transfer of a whole business as a going concern is outside the scope of VAT if specific conditions are met.
A VAT rule treating the sale of a business as outside the scope of VAT, avoiding a large VAT charge on the transaction.
The Transfer of Undertakings (Protection of Employment) Regulations, which automatically move employees, their existing terms and continuity of employment, to a new employer when a business, part of a business, or a service contract changes hands.
A consumption tax added to most goods and services, currently 20% standard rate in the UK.
An optional VAT scheme for smaller businesses that lets them account for VAT based on payments actually received and made, rather than on invoice dates, improving cash flow and reducing bad debt exposure.
Simplified VAT for small businesses — pay a fixed % of gross turnover instead of accounting for input VAT.
A simplified VAT scheme for small businesses turning over under GBP 150,000 that pay HMRC a fixed percentage of gross turnover instead of tracking input and output VAT.
A sales invoice issued by a VAT-registered business that includes specific details required by HMRC, such as the VAT registration number and the VAT charged, so the customer can reclaim input VAT.
A VAT scheme allowing businesses selling second-hand goods, antiques, art or collectibles to pay VAT only on their profit margin rather than the full selling price.
A simplified VAT reporting scheme that historically let UK businesses selling digital services to EU consumers report all EU VAT through a single return, largely superseded post-Brexit by direct EU VAT registration.
The annual turnover above which a UK business must register for VAT (£90,000 in 2026/27).
The periodic report a VAT-registered business submits to HMRC, usually every three months, declaring the VAT charged on sales and the VAT reclaimed on purchases, and paying or reclaiming the difference.
Legal protection under the Public Interest Disclosure Act for workers who raise genuine concerns about wrongdoing at work, shielding them from dismissal or other detriment for having spoken up.
A formal court application, usually by a creditor such as HMRC, asking for a company to be compulsorily wound up (liquidated) because it cannot pay a debt, typically issued after a statutory demand has gone unpaid.
The difference between a business's current assets and current liabilities, measuring its ability to meet short-term financial obligations and fund day-to-day operations.
An employment arrangement with no guaranteed minimum hours, where the worker is offered work as and when available and is generally free to decline it, with statutory protections against exclusivity clauses and detriment for refusing work.
Goods and services charged VAT at 0%, such as most food, books and children's clothes, which still count as taxable supplies -- unlike exempt supplies, which fall outside VAT entirely.
A UK government scheme giving eligible working parents of children from nine months old up to 30 hours a week of funded childcare during term time, expanded in stages through 2024 and 2025.
A free, compulsory service run by ACAS that gives employers and employees a chance to settle a workplace dispute before an employment tribunal claim can be lodged.
A government grant that helps disabled people, or those with a physical or mental health condition, pay for practical support to start or stay in work.
A County Court order consolidating several debts into a single affordable monthly payment, available where at least one debt is a County Court Judgment and total qualifying debts are below £5,000, freezing interest and enforcement action on included debts while it runs.
A Universal Credit measure that diverts part or all of a claimant's payment, such as paying rent directly to the landlord.
An income tax charge on pension contributions exceeding the Annual Allowance (£60,000 in 2026/27), levied at the member's marginal rate.
A tax-free benefit for people over State Pension age who need help with personal care or supervision because of a physical or mental disability.
A non-means-tested benefit for people over State Pension age who need help with personal care or supervision because of a disability or long-term health condition, paid at one of two weekly rates depending on the level of care needed.
A credit card that lets you move existing debt from another card onto it, usually at a low or 0% promotional interest rate for a set period, in exchange for a one-off balance transfer fee.
A large lump-sum payment due at the end of a finance agreement, most often used in PCP car finance, that must be paid to take full ownership of the asset.
A court order (or, in England and Wales, an adjudicator's decision) that formally declares an individual unable to pay their debts, placing their assets under the control of a trustee for the benefit of creditors and typically discharging most qualifying debts after 12 months.
A court order extending the restrictions of bankruptcy for 2-15 years beyond the normal 12-month discharge, imposed where the Official Receiver finds evidence of dishonest or blameworthy conduct.
The Bank of England's official interest rate, set by the Monetary Policy Committee (MPC), which influences mortgages, savings rates, and the wider UK economy.
A reduction to Housing Benefit or the Universal Credit housing element for working-age social tenants assessed as having more bedrooms than their household needs.
A limit on the total weekly benefits a household can receive, set at GBP 442.31/week for couples and lone parents outside London in 2026/27, ensuring work always pays more than welfare.
A government limit on the total weekly welfare benefits a household can receive, applied to most working-age claimants.
A package of three one-off Scottish payments helping lower-income families with the costs of a child's early years, from pregnancy to starting school.
A national scheme permit that lets disabled people, or those who drive them, park closer to destinations with extra concessions on restricted parking.
Forthcoming regulation bringing unregulated Buy Now, Pay Later credit agreements under FCA oversight, giving BNPL users credit-agreement protections and affordability checks they currently lack.
A government grant of up to £7,500 to help households in England and Wales replace fossil fuel heating with heat pumps or biomass boilers.
A government debt-respite scheme that temporarily pauses interest, fees and enforcement action against people in problem debt while they seek a solution.
A short-term credit product allowing shoppers to split a purchase into instalments, often interest-free, typically offered by third-party providers at online checkout.
A type of defined benefit pension where each year's pension is based on that year's pay, revalued for inflation, rather than on final salary at retirement.
A UK benefit for people who regularly spend at least 35 hours a week caring for someone who receives a qualifying disability benefit.
A taxable benefit for people who spend at least 35 hours a week caring for someone with a qualifying disability benefit, subject to an earnings limit; receiving it can reduce the cared-for person's means-tested benefit entitlement through an overlapping-benefit rule.
A National Insurance credit for people caring for a sick or disabled person for at least 20 hours a week who do not qualify for Carer's Allowance, protecting their State Pension record without any cash payment.
A family court order setting out where a child will live and how much time they spend with each parent, replacing the older "custody" and "residence/contact order" terminology.
The government statutory service that calculates, and can collect and enforce, child maintenance payments from a paying parent to a receiving parent, based on the paying parent's gross weekly income and the number of qualifying and relevant children.
A fraud warning recorded against a person or address on the CIFAS National Fraud Database, visible to member organisations.
A court order that ends all future financial claims between divorcing spouses, settling matters with a one-off division of capital rather than ongoing maintenance payments.
A written agreement between unmarried partners living together setting out how property, finances and belongings will be handled during the relationship and if it ends.
A proposed change to give unmarried couples who live together some legal protections on separation or death, similar to those married couples and civil partners already have — not yet enacted into law.
A GBP payment made to people on certain benefits when the local temperature is recorded or forecast at or below freezing for seven consecutive days.
A claim available when an employee resigns in response to a fundamental breach of contract by their employer, treating themselves as dismissed even though they were not formally sacked.
An FCA rule that came into full force in 2023 requiring financial firms to act to deliver good outcomes for retail customers, covering products and services, price and value, consumer understanding, and consumer support.
The UK's main measure of inflation, tracking price changes of a basket of goods and services. Used to uprate benefits, State Pension, and some tax thresholds.
The main UK law setting out consumers' legal rights when buying goods, digital content or services, including that goods must be of satisfactory quality, fit for purpose and as described.
A legal dispute over a deceased person's will, estate or how it is administered, resolved through negotiation, mediation or the courts.
NHS funding that fully covers the care costs of adults with a primary health need, regardless of their income or assets.
A recurring permission given to a company to take payments from a debit or credit card whenever it decides, commonly used by subscriptions, gyms and payday lenders.
Pension built up during a period when you or your employer contracted out of SERPS/S2P, paying lower National Insurance in exchange for benefits from an occupational or personal pension.
A form of ESA paid based on an individual's National Insurance record rather than their household income or savings, now called "new style" ESA and payable regardless of a partner's earnings or the claimant's savings.
A statutory right allowing a borrower to withdraw from most regulated credit agreements, free of charge, within 14 days of signing (or of receiving a copy of the agreement, if later), requiring only repayment of any capital advanced plus interest for the days credit was actually used.
A series of one-off, tax-free government payments made automatically to households receiving means-tested benefits, Pension Credit or certain disability benefits during periods of high inflation.
The valuation band (A to H or I) that determines how much Council Tax you pay.
A court order issued against you for failing to repay a debt. Stays on your credit file for 6 years and can affect your ability to borrow or rent.
The specialist court in England and Wales that makes decisions for, and appoints deputies to act for, people who lack the mental capacity to decide for themselves.
The smallest amount a credit card provider requires you to pay each month to keep the account in good standing and avoid late fees.
A company that collects financial data on individuals and businesses and provides credit reports to lenders, allowing them to assess creditworthiness before making lending decisions.
A numerical rating produced by a credit reference agency, based on someone's credit history, used by lenders to assess how risky it would be to lend to them.
The percentage of your available credit that you are actually using, calculated as outstanding balances divided by total credit limits.
An insurance policy that pays a tax-free lump sum if you are diagnosed with a serious illness specified in the policy.
FCA rules, in force since October 2023, requiring cryptoasset firms marketing to UK consumers to follow strict standards including risk warnings, a 24-hour cooling-off period for first-time investors, and a ban on referral bonuses.
The process by which a creditor or an agency acting on its behalf pursues an unpaid debt and seeks repayment from the borrower.
A single new loan taken out to pay off several existing debts at once, replacing multiple repayments with one, ideally at a lower overall interest rate.
An informal arrangement with creditors to repay unsecured debts at a reduced, affordable monthly rate, usually administered by a third-party debt advice organisation.
A form of personal insolvency in England and Wales that writes off qualifying debts for people with low income, few assets and a relatively small total debt.
The former legal term for the final order that legally ends a marriage, now replaced by the plainer term "final order" under the no-fault divorce system introduced in April 2022.
A legally binding written promise to make regular payments (historically used for tax-efficient giving to charity or family members) or to take on specific ongoing obligations, such as shared repair costs.
A marker added to a credit reference file when a borrower falls seriously behind on a debt and the lender formally treats the agreement as broken down, remaining visible to other lenders for six years from the default date regardless of when the debt is later paid.
A former employee who has left a pension scheme but not yet started drawing benefits -- their accrued rights remain preserved in the scheme.
A workplace pension that promises a specified retirement income based on salary and years of service, with investment and longevity risk borne by the employer rather than the member.
When someone deliberately reduces their wealth -- by gifting, spending or transferring assets -- to qualify for means-tested support such as care funding or benefits.
A court-granted authority allowing someone to make decisions for a person who lacks mental capacity and has no valid power of attorney.
A tax-free benefit for children under 16 with a disability or health condition across the UK, and for adults in Scotland only, replaced by PIP for working-age adults in the rest of the UK.
A formal internal process an employer follows when it has concerns about an employee's conduct or performance, typically involving an investigation, a hearing, and a right of appeal.
An extra, short-term payment from your local council to help cover rent or housing costs when your benefits do not stretch far enough.
Consumer protection rules giving buyers of goods and services bought online, by phone or by mail order a statutory 14-day right to cancel and get a refund, in most cases without giving a reason.
The fourth phase of the Energy Company Obligation, requiring larger energy suppliers to fund home insulation and heating upgrades for low-income and fuel-poor households.
A benefit for people whose ability to work is limited by illness or disability, paid at a basic assessment-phase rate and then, once assessed, at a higher main-phase rate if placed in the support group.
The legal classification of a working individual as an employee, worker or self-employed, which determines what rights, tax treatment and protections apply to them.
The specialist court in England, Wales and Scotland that hears workplace disputes such as unfair dismissal, discrimination and unpaid wages claims, usually after ACAS Early Conciliation.
The person named in a will who is legally responsible for administering a deceased person's estate and carrying out their wishes.
The person or people named in a will who are legally responsible for administering the deceased's estate -- collecting assets, paying debts and tax, and distributing what remains to the beneficiaries.
The 12-month period from the date of death within which executors are generally expected to gather, settle and distribute a deceased person's estate.
A single new enforcement body, created by the Employment Rights Act 2025, that brings together enforcement of the National Minimum Wage, statutory sick pay, holiday pay, and other core employment rights under one regulator.
The UK regulator responsible for conduct standards in financial services, overseeing banks, insurers, mortgage lenders, investment firms and consumer credit providers to protect consumers and markets.
When individuals lack access to mainstream financial services such as bank accounts, affordable credit, insurance or savings products.
An independent UK body that settles disputes between consumers and financial businesses free of charge, with the power to award compensation of up to £415,000.
A practice where an employer dismisses employees who refuse to accept changes to their contract terms and then immediately re-engages them on the new, less favourable terms.
The standard gap of roughly five weeks between a Universal Credit claim being made and the first regular monthly payment arriving, bridged for many claimants by a repayable Universal Credit advance.
A fraud alert is a warning placed on your credit file or account to flag suspected fraudulent activity and prompt extra identity checks.
The assets a deceased person owned outright in their sole name that pass under their will or the intestacy rules through the probate process.
A means-tested entitlement to free lunches for children of families receiving qualifying benefits, separate from the universal infant free school meals given to all children in Reception to Year 2.
A UK government payment that helps people on certain qualifying benefits with the cost of arranging a funeral for which they are responsible.
Optional insurance that covers the shortfall between a car's comprehensive motor insurance payout after a total loss and the amount still owed on finance, or the original purchase price.
A legal document confirming an executor's authority to administer and distribute the estate of someone who has died leaving a will.
An official court document authorising someone to deal with a deceased person's estate, covering both grants of probate and letters of administration.
A formal internal process an employee follows to raise a concern or complaint about their treatment at work, following the ACAS Code of Practice on disciplinary and grievance procedures.
Conduct serious enough to destroy the employment relationship, allowing an employer to dismiss an employee immediately without notice or pay in lieu of notice.
The main part of Pension Credit, which tops up a pensioner's weekly income to a minimum guaranteed level -- £238.00 for a single person and £363.25 for a couple in 2026/27 -- if their income falls below it.
The minimum pension a contracted-out defined benefit scheme must provide, broadly equivalent to the SERPS benefit the member gave up between 1978 and 1997.
A personal loan where a third party, typically a family member or close friend with good credit, agrees to make the repayments if the borrower fails to, allowing people with limited or poor credit history to borrow at lower rates than unsecured bad-credit lenders would offer.
A tax-free benefit paid to someone bringing up a child whose parents have died, paid on top of Child Benefit.
A condition for entitlement to many UK means-tested benefits requiring claimants to have their settled centre of interest within the Common Travel Area (UK, Ireland, Channel Islands and Isle of Man).
A formal credit search that a lender records on your credit file when you apply for credit, visible to other lenders and capable of affecting your credit score.
A full credit check carried out when you formally apply for credit, which is recorded on your credit file, visible to other lenders, and can temporarily lower your credit score.
An NHS scheme giving a prepaid card to qualifying pregnant women and families with young children to buy food and milk.
The FCA's regulatory category for consumer credit products with very high borrowing costs, including payday loans, home-collected credit and some guarantor and logbook loans.
A finance agreement where the buyer pays fixed instalments to use an item, such as a car, but only becomes its legal owner after the final payment is made.
A now-abolished scheme (1978 to 2010) that reduced the number of qualifying years needed for State Pension for parents and carers, since converted into National Insurance credits on the new State Pension.
A government-funded scheme distributed by local councils in England to help vulnerable households with essential costs such as food, energy and water.
A government grant distributed by English local councils to help vulnerable households cover essentials like food, energy and water bills.
A means-tested benefit that helps pay rent, now largely replaced by Universal Credit except for pensioners and people in supported or temporary accommodation.
A way of taking a flexible retirement income directly from an invested pension pot, rather than buying a guaranteed annuity, with the remaining fund staying invested.
A personal insurance policy that pays a regular tax-free income if you cannot work due to illness or injury.
A means-tested form of ESA topping up or replacing contribution-based ESA for claimants with low income and savings, now closed to most new claimants and largely replaced by Universal Credit.
A formal agreement between an individual and their creditors to repay debts, usually over 5 years. An alternative to bankruptcy overseen by an insolvency practitioner.
A trust where a named beneficiary has the immediate right to the trust's income, or to use trust property, as it arises.
The situation where someone dies without a valid will, so statutory rules decide who inherits their estate.
The fixed legal rules that decide who inherits a deceased person's estate, and in what shares, when they die without a valid will in England, Wales or Northern Ireland.
A written document that medium and large UK private sector businesses (and all public sector bodies) must provide to contractors and their agencies, determining whether IR35 applies to each engagement.
A benefit for people who are unemployed or working under 16 hours a week and actively seeking work; "new style" JSA is a contribution-based benefit paid for up to 182 days, separate from, but often claimed alongside, Universal Credit.
A benefit for people who are unemployed and looking for work, available as contribution-based New Style JSA or as part of a Universal Credit claim.
A legal document letting you appoint trusted people to make decisions about your finances or health if you lose mental capacity.
A court grant authorising someone to administer the estate of a person who died without a valid will, or without a usable executor.
A trust giving one person the right to income or use of assets for life, with the capital passing to others afterwards.
A benefits assessment outcome meaning your illness or disability limits the work you can do, affecting Universal Credit and ESA entitlement.
A defined benefit occupational pension scheme for UK local council and related public sector employees, now run on a Career Average Revalued Earnings basis.
The maximum Housing Benefit rate payable to private renters, set by the Valuation Office Agency at the 30th percentile of local rents in each Broad Rental Market Area.
A high-cost loan secured against a vehicle the borrower already owns, where the lender holds a legal charge (bill of sale) allowing repossession without a court order if repayments are missed.
The household income assessment used to determine how much maintenance loan a student receives towards living costs, with the loan tapering down as parental (or partner's) income rises.
The formal DWP process of moving legacy benefit claimants (Working Tax Credit, Housing Benefit, Income Support etc.) to Universal Credit by issuing a migration notice and a 3-month deadline to claim, with transitional protection available to prevent immediate income loss.
The DWP process of moving existing legacy benefit claimants -- Working Tax Credit, Housing Benefit and others -- to Universal Credit by issuing a migration notice with a deadline to claim.
A formal request asking the DWP or HMRC to look again at a benefit or tax credit decision before you can appeal to a tribunal.
A low-cost route into Scottish bankruptcy (sequestration) for people with debts between £1,500 and £25,000, minimal assets, and low income.
A Universal Credit rule that assumes self-employed claimants earn at least the National Living Wage for their expected hours, regardless of actual earnings.
An HM Courts and Tribunals Service website that lets people and businesses issue a simple money claim against a debtor over the internet, without needing to attend a court building.
A UK scheme allowing recipients of the higher-rate mobility benefit to exchange some or all of that payment for a leased car, scooter, or powered wheelchair, including insurance, maintenance, and breakdown cover.
The State Pension system for people reaching State Pension age on or after 6 April 2016, paying a single flat weekly rate (£241.30 in 2026/27) based on National Insurance qualifying years rather than the old two-tier structure.
A workplace service that supports employee health and wellbeing, advising on fitness for work, adjustments and managing illness or injury at work.
The maximum default tariff energy suppliers can charge most UK households.
A payment made directly from a customer's bank account to a merchant or biller, authorised through the customer's own banking app, without using a card network.
A small, short-term high-cost loan designed to be repaid on the borrower's next payday, now subject to an FCA price cap limiting total repayable interest and fees.
An insurance product, historically sold alongside loans and credit cards, intended to cover repayments if the borrower fell ill, was made redundant or died, but widely mis-sold across the UK.
A car finance agreement where monthly payments cover only the difference between the car's price and its predicted future value, leaving a large optional final payment to actually own the car.
A divorce court order that earmarks part of an ex-spouse's future pension income or lump sum for the other party, paid only once the pension holder actually draws their pension.
A means-tested benefit for people over State Pension age on a low income, made up of Guarantee Credit (tops income up to a minimum level) and, for some, Savings Credit.
The means-tested element of Pension Credit that tops up a pensioner's weekly income to a guaranteed minimum level, and which also acts as a passport to other help such as free TV licences for over-75s and Winter Fuel Payments.
The main means-tested part of Pension Credit that tops up a pensioner's weekly income to a guaranteed minimum level, regardless of when they reached State Pension age.
A pension that has been crystallised and is actively being drawn -- the member receives regular income, which is subject to income tax via PAYE.
A court order on divorce allocating a percentage of one spouse's pension rights to the other, implemented as a pension debit/credit transfer.
A free, impartial government-backed guidance service, run by MoneyHelper, offering appointments to people aged 50 and over to explain their options for accessing a defined contribution pension.
FCA rules requiring credit card providers to intervene — and eventually offer to reduce or waive interest — when a customer has paid more in interest and charges than they have repaid of their balance over 18 months.
A long-term vehicle lease where you pay fixed monthly rentals to use a car for an agreed term and mileage, then hand it back -- you never own the car.
A non-means-tested benefit for people under State Pension age with a long-term physical or mental health condition or disability, made up of a daily living component and a mobility component, each payable at a standard or enhanced rate based on an assessed points score.
A tax-free benefit for people aged 16 to State Pension age with a long-term physical or mental health condition or disability, paid regardless of income, savings or employment status.
A limited company set up by a contractor to provide their services to clients, allowing income to be taken as salary plus dividends -- the entity at the centre of IR35 off-payroll working rules.
One of the two elements of Personal Independence Payment, paid at a standard or enhanced weekly rate to help with the extra costs of getting around, assessed separately from the daily living component.
A legal document letting someone appoint another person (or people) to make decisions on their behalf -- the general term covering both ordinary and lasting powers of attorney.
A set of court-mandated steps a creditor must follow before starting County Court debt proceedings against an individual, including sending a formal letter of claim, providing an information sheet and reply form, and allowing 30 days to respond.
The fixed fee payable to the Probate Registry when applying for a Grant of Probate or Letters of Administration, waived for smaller estates and unaffected by the size of the estate above the threshold.
An initial period at the start of a new job, commonly three to six months, during which an employer assesses a new employee's suitability before confirming their permanent employment.
A without-prejudice discussion under section 111A of the Employment Rights Act 1996 that lets an employer raise the possibility of ending someone's employment on agreed terms without the conversation being used as evidence in an ordinary unfair dismissal claim.
A formal Scottish debt solution where a trustee takes control of a debtor's assets and income, usually over 48 months, in exchange for writing off the remaining debt at the end.
Changes an employer or service provider must make to remove disadvantages faced by disabled people under the Equality Act 2010.
The APR that a lender must offer to at least 51% of customers who take out a credit product, shown in adverts as an example rate that better-qualified applicants may beat and others may not get.
A finance company's estimate of what a car will be worth at the end of an agreement, used to set the optional final balloon payment on PCP deals and the monthly payments that lead up to it.
A person or charity entitled to the residuary estate -- whatever remains after debts, taxes, expenses and specific gifts have been paid.
The part of a deceased person's estate left over after debts, taxes, expenses and specific gifts have all been paid.
An older measure of UK inflation, generally running higher than CPI, still used to uprate some rail fares, student loans and index-linked gilts.
A proposed workplace right allowing employees to switch off from work communications outside contracted hours without facing detriment, expected to be introduced via a statutory code of practice.
An extended period of unpaid or partly paid leave, granted at an employer's discretion, that lets an employee take an extended break from work while usually retaining a right to return to their job.
A now largely closed element of Pension Credit that gives a small extra amount to reward modest private pension or savings income, available only to people who reached State Pension age before 6 April 2016.
A mechanism letting pension scheme members ask the scheme to pay their Annual Allowance tax charge directly to HMRC from the pension pot.
A weekly devolved benefit from Social Security Scotland for low-income families with children under 16 who receive a qualifying benefit.
A legal right under the Consumer Credit Act 1974 making a credit card provider jointly and severally liable with the retailer for a breach of contract or misrepresentation on purchases between £100 and £30,000, even where only part of the price was paid by card.
The Scottish legal process equivalent to bankruptcy in England, through which an individual's debts are formally discharged after approximately 12 months under the Bankruptcy (Scotland) Act 2016.
The simplified, lower-cost court procedure used for most money claims worth £10,000 or less in England and Wales, designed to let people bring or defend a claim without needing a solicitor.
A mandatory scheme requiring larger energy suppliers to pay households for surplus renewable electricity exported to the national grid from solar panels or other eligible technologies.
A search of your credit file that is visible only to you and does not affect your credit score, often used for eligibility checks.
A preliminary credit check, such as an eligibility checker or a quote, that does not affect your credit score and is visible only to you, not to other lenders.
A National Insurance credit that lets a working parent transfer the Class 3 NI credit they get from claiming Child Benefit to a grandparent or other family member who provides childcare instead.
Regular payments one ex-spouse makes to the other after divorce to help meet their income needs, separate from child maintenance and from the division of capital and property.
A free online or postal statement from HMRC and DWP showing an individual's current State Pension entitlement, projected amount at State Pension age, and any gaps in their National Insurance record.
A debt that can no longer be enforced through the courts because the legal time limit for taking action has expired under the Limitation Act 1980.
A formal written demand for payment of an undisputed debt of at least £5,000 (for an individual), giving the debtor 21 days to pay or reach agreement before the creditor can petition for bankruptcy, or 3 weeks before a company can face a winding-up petition.
A one-off £500 tax-free payment to help with the costs of a new baby for low-income families on qualifying benefits in England and Wales.
A one-off, tax-free payment of 500 pounds to help with the costs of a new baby, available to claimants of a qualifying means-tested benefit who have no other children under 16, or who are expecting a multiple birth.
A Universal Credit rule that carries forward unusually high earnings to reduce payments in following months.
An amount of Working Tax Credit or Child Tax Credit paid in excess of entitlement that HMRC is entitled to recover, typically through reductions in future awards or direct collection.
UK government service to report a death to most government departments in one go.
A life insurance policy that pays out a lump sum if the policyholder dies within a fixed term, commonly used to cover a mortgage or provide for dependants, with no payout and no value if the term ends without a claim.
A standard feature of most life insurance policies that pays out the full sum assured early, while the policyholder is still alive, if they are diagnosed with a terminal illness and given a limited life expectancy.
The UK's regulator of workplace pension schemes, responsible for enforcing auto-enrolment duties, overseeing scheme governance and protecting members' pension savings.
A statutory right allowing employees to take a reasonable amount of unpaid time off work to deal with an unexpected emergency involving a dependant, such as a child, spouse or elderly parent.
A County Court order under the Consumer Credit Act 1974 that reduces a borrower's repayments on a regulated credit agreement to an affordable level and can reduce the interest rate, typically used as a defence against a creditor's repossession or enforcement claim.
The full amount a borrower will pay over the life of a loan or credit agreement, including all interest and compulsory charges, minus the amount originally borrowed.
The lump sum a defined benefit pension scheme would pay to a receiving scheme if you transfer out -- reflecting the capital value of your accrued pension rights.
The government commitment to increase the New and Basic State Pension each April by whichever is highest: average earnings growth, CPI inflation, or 2.5%.
A UK government loan that pays a student's university tuition fees directly to the institution, repaid only after graduation once income exceeds the relevant Plan threshold.
A restriction limiting the child element of Universal Credit and Child Tax Credit to a maximum of two children per family, for most children born on or after 6 April 2017.
A statutory employment right allowing an eligible employee to claim compensation at an employment tribunal if their employer ended their job without a fair reason or without following a fair process.
The rate at which your Universal Credit payment is reduced as your take-home earnings rise above any work allowance you qualify for.
The amount a Universal Credit claimant with children or limited capability for work can earn before their award starts to be reduced by the taper rate, set at different levels depending on whether they also receive help with housing costs.
A statutory right for eligible employees to take up to 18 weeks of unpaid leave per child, up to their 18th birthday, to look after a child's welfare, separate from paid maternity, paternity or adoption leave.
An Open Banking payment permission letting a business take a series of payments of varying amounts directly from a customer's bank account, within limits the customer sets once.
Vehicle Excise Duty — UK annual road tax. £195 flat from year 2 for most cars.
A legal right under the Consumer Credit Act 1974 to hand back a car on hire purchase or PCP once you have paid at least 50% of the total amount payable, ending the agreement early.
An optional add-on to a life, critical illness or income protection policy that pays the premiums on the policyholder's behalf if they become unable to work due to illness or injury.
A one-off £150 rebate on your winter electricity bill for eligible low-income and pensioner households, paid automatically by your energy supplier.
A one-off £150 discount applied to the electricity bill of eligible low-income households, usually credited automatically between autumn and early spring.
A life insurance policy that pays out a guaranteed lump sum whenever the policyholder dies, however long they live, unlike term life insurance, which only pays out if death occurs within a fixed term.
A benefit paid to some widowed parents whose spouse or civil partner died before 6 April 2017, replaced for later deaths by Bereavement Support Payment.
An annual tax-free payment towards heating costs for pensioners, now means-tested so it only goes automatically to those receiving Pension Credit or another qualifying benefit.
The amount some Universal Credit claimants can earn before the taper rate starts to reduce their award, available only to claimants with dependent children or limited capability for work.
The DWP assessment used to decide whether a health condition or disability limits someone's ability to work, determining eligibility for Employment and Support Allowance or the Universal Credit limited capability for work element.
A legally required document setting out the core terms of a job — pay, hours, holiday and notice — which employers must give to employees and workers from their first day of employment.
A breach-of-contract claim, distinct from unfair dismissal, that arises when an employer ends employment without giving the notice, or following the process, required by the employment contract.
A UK regulation requiring vehicle manufacturers to sell a minimum percentage of zero-emission vehicles each year, rising annually toward 80% of cars by 2030.
