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Glossary

Full A-Z

  • Anderson Principles

    Found in:

    Tax guidelines first laid out for businesses in 1944 by the then Chancellor of the Exchequer, Sir John Anderson.

  • Automatic accrual method

    Found in:

    Used by partnerships, this agreement means if a partner dies, their shares automatically pass to the remaining business partners.

  • Beneficiary

    Found in:

    The beneficiaries receive the money from the trust in line with the settlor's wishes.

  • Buy and sell agreements

    Found in:

    Legally binding agreements setting out who can buy shares and at what price.

  • Capital gains tax

    Found in:

    A tax on capital gains, which is normally only paid when you sell an asset.

  • Civil Partnership

    Found in:

    (in some countries) A legally recognized union of a same-sex couple, with rights similar to those of marriage.

  • Corporate debt cover

    Found in:

    Another term for Key Person cover, set-up to pay off corporate debt, like a business loan.

  • Cross option agreement

    Found in:

    An agreement allowing surviving business owners to buy a deceased owner’s share. A cross option agreement can be signed when taking out Share Protection or Partner Protection.

  • Director’s loan account

    Found in:

    A loan made by a director to the company. This can be made up of money actually loaned, undrawn salary or dividends.

  • Equalisation of premiums

    Found in:

    When it comes to Share Protection and Partnership Protection, it makes sense for the business owners to pay an appropriate share of the premiums. Age, health and lifestyle affects the cost of cover, so splitting the total premium by the number of business owners might not be the fairest way of dividing the cost.

  • Gifted benefits

    Found in:

    The benefits from the plan that the settlor wants to give to someone else.

  • Inheritance tax

    Found in:

    A tax payable on an estate when someone dies.

  • Key Person cover

    Found in:

    A life insurance policy (with or without critical illness) taken out by a company on the life of an employee or director. This is often referred to as Key Man Cover or Key Man Insurance.

  • Life of another

    Found in:

    Life Insurance taken out on the life of another person.

  • Limited company

    Found in:

    A business run by directors on behalf of shareholders.

  • Limited liability partnership

    Found in:

    A business owned by two or more people, who are liable up to the amount of money they invested in the company.

  • LV= Business Care

    Found in:

    Consists of:

    Business Legal Advice Line for business owners, providing free legal advice 24/7 on business issues including; HR, health & safety, risk, and legislation.

    Personal Advice Line which offers 24/7 access to legal, counselling and health advice to the policy owners, those insured and those remaining employees not covered by an LV= business protection policy from LV=.

  • Own life in trust

    Found in:

    A life insurance taken out by someone on their own life, written in trust.

  • Owners Insurance

    Found in:

    Another term for Partner Protection or Share Protection.

  • Partnership

    Found in:

    A partnership is defined as the relationship that exists between persons carrying on business with a view to a profit.

  • Partnership Protection

    Found in:

    A life insurance arrangement put in place by partners to protect the ownership of their partnership

  • Probate

    Found in:

    The legal process in England, Wales and Northern Ireland of confirming who can deal with an estate after someone dies, before the assets of the estate can be distributed according to the terms of the will, or if there is no will, the rules of intestacy. Probate in Scotland is governed by Scots law.

  • Relevant Life Cover

    Found in:

    A tax-efficient life insurance policy offered by companies to provide death-in-service benefits to their employees. This is sometimes referred to as a Relevant Life Policy.

  • Settlor (trusts)

    Found in:

    The person or people who sets up the trust and chooses the trustees to administer the trust and decide who the beneficiaries will be.

  • Share Protection

    Found in:

    A life insurance arrangement put in place by shareholders to protect the ownership of their business. The policy can also include critical illness cover. This is sometimes called Shareholder Protection.

  • SME

    Found in:

    A small to medium enterprise - a business with 0 - 250 employees.

  • Sole trader

    Found in:

    An unincorporated business owned by one person that may or may not have employees

  • Sole trader insurance

    Found in:

    Another term for Key Person cover. If the sole trader dies, the proceeds from Key Person cover can be used to clear business debt (which would otherwise be inherited by the sole trader’s next of kin).

  • Succession planning

    Found in:

    A process for identifying key and important people within the business with a view to having a clear plan in place should one of them leave, become critically ill, or die.

  • Trust

    Found in:

    A trust sets aside a potential benefit to a specified person, people or charity (the beneficiaries), which is managed by a trustee or trustees and makes sure that the money from your client’s policy is paid to the right people, quickly and tax efficiently.

  • Trust deed

    Found in:

    This is the legal document that establishes and governs the trust.

  • Trustees

    Found in:

    Manage the trust fund for the beneficiaries. This includes making any claim under the policy.