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Tax avoidance

Legal ways to avoid paying too much tax. Illegal ways are tax evasion.

Tax Credits

An amount you can subtract from the tax you’d otherwise have to pay. Current tax credits include those for working families, and those with children.

Tax-efficient investments

Investments that have less of a tax consequence than other investments

Tax exempt

Investments which do not attract tax - such as ISAs.

Tax year

The tax year begins on April 6, and ends on April 5 the following year.

Term insurance

Also known as term assurance. This is life insurance that pays out if you die during the term of the policy. If you survive the term of the policy, you don’t receive anything. This type of policy is often used to cover long term loans or mortgages. It is the simplest and cheapest form of life insurance.

Tied agent

A tied agent is a financial salesman who can only offer to sell the products of one company, rather than an independent financial adviser who can look at the whole market for products that best suit you.

Total return

The total return on an investment is the combination of both the income return and any capital gain or loss.

Tracker fund

These are funds that invest in a share portfolio (for example, the FTSE 100) weighted according to the market capitalisation of the various shares in it. Tracker funds are not managed (unlike actively managed funds) and are therefore usually cheaper to buy.

Transfer value

The value of the pension benefits you are allowed to take if you decide to leave an occupational pension scheme. The precise value of these benefits will be calculated by an actuary who works for the pension scheme administrator.


An individual or organisation that looks after assets for the benefit of another.

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