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Glossary

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 E....

 

Early Leavers.Generally refers to occupational pension scheme members who leave the scheme before normal retirement age.

Earnings Cap. See 'Cap'. Earnings Per Share. A ratio calculated as share earnings for the year divided by number of shares in issue Earnings Yield. A company's earnings available for shareholders dividend by the current market value of the company's equity capital, or earnings per share dividend by the share price.

Easement. Rights of a landowner exercised over neighbouring land e.g. a right of way. Econometrics. Mathematical methods used in analysing economic models or problems.

Economic. Whether something can be produced profitably.

Economics. The study of an economy (business, or country or trade grouping) and its related financial structures and procedures. Effectiveness. A measure of achievement in respect of a specific objective.

Efficiency. A measure of output compared to input.

Eiusdem Generis Rule. One of the principle rules of interpretation of statutes, meaning 'of the same kind'. It is taken to mean that where general words follow specific words, those general words are interpreted in the light of the specific words - For example, in the phrase 'cats, dogs and other animals', 'other animals' will be interpreted by the court as referring to other domestic animals.

Election. An unequivocal choice.

Electro-Cardiogram. A device to measure the activity of the heart.

Eligibility. Most occupational pension schemes have age and service qualifications that must be met before an individual is able to join the scheme. Such qualifications may be termed eligibility conditions.

Embargo. Instruction which stops or delays something happening - usually relates to a trading situation, but may also relate to release of information e.g. company announcement.

Embezzlement. A form of theft; the misappropriation of an employers funds by an employee.

Emoluments. Used as a term for the total earnings package when calculating the potential benefits from an occupational pension scheme, and calculating maximum approvable benefit limits.

Employee. Someone who works under the control and direction of another in return for wages/salary.

Employee Profit Sharing Scheme. A type of share incentive scheme whereby a special trust is established to purchase company shares which, provided certain conditions are met, will escape income tax on profits on resale.

Employee Share Incentive Schemes. Arrangements which enable employees to purchase the shares of their employing company, some with tax advantages, some without.

Employee Share Ownership Plans. Share incentive schemes which allow the employing company to make tax deductible contributions into an Employee Share Ownership Trust. Trustees then use the money to buy company shares for all participating employees, who qualify by reference to working hours and length of time employed by the company.

Employer. Someone who controls and directs the work of another, an employee, in a master/servant sense, and who pays that person a wage or salary for work done.

Endorse. Signature on a document e.g. cheque, to show that ownership has passed, or e.g. a bill, to show that goods have been received. Add additional information to an insurance policy to amend the existing wording.

Endowment Assurance. A medium to long term life assurance/savings contract, incorporating an investment element and a protection element. Policy proceeds normally paid on maturity or earlier death. After early years policy acquires surrender value. See 'Maximum Investment Plan'.

Endowment Mortgage. An interest only property purchase loan where the outstanding capital will be repaid at the end of the term out of the fund accumulated under an endowment policy.

Engrossment. Preparation of a legal document in its final form prior to signing. Enterprise Investment Scheme. Introduced by the November 1993 budget as a replacement for the BES scheme which ended 31/12/93. Investors can invest up to £100,000 each year and get 20% tax relief; an additional 20% is available if the venture fails.

Enterprise Zone Trusts. Property trusts investing in enterprise zones, or areas in which businesses receive special government incentives for a fixed period. Investors in these trusts can write off most of their investment against income tax liabilities.

Enterprise Zones. Designated areas throughout the country offering special tax incentives to encourage investment in commercial property.

Equal Access. The equal access provisions of legislation relating to occupational pension scheme membership make it obligatory to offer the same eligibility conditions to men and women doing the same type of job.

Equalisation of Estates. When a husband and wife divide their assets so that they save the maximum amount of tax. Equities. Common alternative term for ordinary shares.

Equity. The value of a business (assets less liabilities, but excluding ordinary share capital) or of a property less the amount of the mortgage.

Equity of Redemption. The rights of the mortgagor, i.e. the property owner, over the mortgaged property. i.e. the right to redeem the property.

Equivalent Pension Benefit. A flat rate state pension benefit paid to employees who contracted out of the graduated pension scheme that was in force before the current SERPs. (Sometimes referred to as the Boyd - Carpenter scheme).

Escalation. A term used to describe contracted increases in pensions in payment, or in regular contributions.

Escrow. A deed which has been delivered, but which will not become operative until a later date or until certain conditions have been met.

Estate. More properly used in connection with ownership of land. Generally used in a wider context, however, relating to one's personal possessions.

Estate Duty. A tax payable on an estate at death between 1894 and 1975.

Estate Planning. General phrase relating to personal financial planning, the emphasis being on passing on intact as much of one's estate on death with as little tax as possible being paid.

Estate Protection. Generally a mix of asset reorganisation and use of packaged life products to reduce tax liability and to pay any tax that does become due.

Ethical Investment. Making investments only in companies which are considered acceptable according to a set of criteria concerning the type of product, environmental issues and political issues.

Eurobond. A medium/long-term bearer bond denominated in a European currency and issued by Government or international companies.

European Currency Unit. Based on a basket of weighted currencies of EU members.

European Monetary System. Means of stabilising exchange rates among members of European Union. See Snake and ERM.

European Monetary Union. Expressed aim of EU.

Ex gratia. A payment made without obligation Ex Officio. Latin, 'by virtue of holding an office' i.e. being in one job will involve taking on other jobs.

Excess Clause. A clause in an insurance policy requiring the policyholder, in the event of a claim, to bear part of the claim.

Exchange Rate. The value of a country's money compared with other currencies.

Exchange Rate Mechanism. (ERM) An underlying element of the European Monetary System which enables EU countries to keep currencies within a fixed percentage of each other, prior to the introduction of the Single Currency Excise. A tax on certain goods produced within national boundaries, as opposed to 'duty', which is generally a tax on imported goods.

Execution only. Where an adviser is instructed by a client to arrange a particular investment, without having received advice from the adviser.

Executive Pension Plan. An occupational pension arrangement governed by occupational pension rules, not Personal Pension rules. Open to employees only. Used by employers with few employees, and to provide discretionary benefits.

Executor. Someone (individual or professional firm) that ensures that the terms of a will are carried out.

Exemplary Damages. Damages awarded to punish the defendant, rather than compensate the plaintiff.

Exempt Approval. The usual route to achieve Revenue approval for a group occupational pension scheme. The main difference between this type of approval and Discretionary approval is the establishment of a trust.

Exempt Approved Scheme. An occupational pension scheme, established by irrevocable trust or statute, which has been approved by the Pension Schemes Office of the Inland Revenue under the Income and Corporation Taxes Act 1988, s592.

Exempt Income. Investment income which escapes tax, such as National Savings Certificate.

Exempt Unauthorised Unit Trusts. Whilst most unit trusts are authorised, authorisation places limitations on the types of investments permitted. Some funds do not seek authorisation, to escape these restrictions. Expatriate. Someone who works away from their own country.

Experienced Investor. One of the categories of investor under the Financial Services regulations; one who regularly invests in their own right and should, therefore, have a clear understanding of the risks and rewards involved.

Expression of Wish. Term generally used in relation to the payment of benefit from a group life assurance scheme, whereby to maintain the tax-free status of payments from the scheme, the Trustees have complete discretion on how to pay out the benefit. Scheme members cannot direct the Trustees, therefore, so must limit their 'instructions' to an informal, non-binding expression of wish. Also known as a Nomination form.

Extra Statutory Concessions. Concessions granted by Inland Revenue to permit actions not normally allowed or to reduce or eliminate tax which would otherwise be payable e.g. Extra Statutory Concession A9 allows GPs to be in NHS Scheme and contribute to personal pension at same time.

 

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UK Investments - Financial, Property & Other Investments - 1998-2008

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