Assignment/Assignation
An assignment (assignation in Scotland) is a transfer of ownership from one person to another. If an offshore bond is assigned under trust, the bond owner assigns the policy to the trustees on behalf of the beneficiaries.

Beneficiary
The person who is eventually going to benefit from the proceeds of a trust.

Chargeable event
Anything that triggers a potential liability for UK Income Tax in respect of life policies. Common chargeable events include taking withdrawals from the policy that exceed the 5% tax-deferred allowance, full or partial cashing in of the policy, or the death of the last life assured on the policy. You’ll receive a chargeable gain certificate if this applies.

Chargeable gain
A chargeable gain is usually triggered by a chargeable event. It’s generally the amount by which the value of a policy exceeds the amount paid into it. Chargeable gains can also arise when the amount withdrawn from certain policies exceeds certain allowances.

Inheritance Tax
A tax which may be levied on your estate when you die. All assets within your estate once the inheritance tax threshold (£325,000 in the tax year 2009/10) has been exceeded will currently be taxed at 40%. This ruling applies to anyone who inherits your estate, unless it is your spouse or civil partner.

Life Assured
The life assured is the person whose life is covered by the contract.

Offshore investment
An investment with a company based in a country other than the one you reside in, and which will usually benefit from a lower tax regime.

Tax-deferred withdrawals
You can take tax deferred withdrawals each year of up to 5% of the total payments made into your bond, up to a maximum of 100% of the total amount paid into the bond. If you do not use your allowance in a particular policy year, you can carry it forward to a future year.

Time Apportionment Relief
If you have been living outside the UK during the period between the start of the policy and the date of the chargeable event, it may be possible proportionately to reduce the gain for the time you were abroad. This is known as Time Apportionment Relief.

Top Slicing
It may be possible to reduce the liability to tax by spreading the gain over, in most cases, the number of years the policy has been in force. This is known as 'top slicing' and is only beneficial if the policyholder becomes a higher rate taxpayer because of the gain, not if they are already a higher rate taxpayer.

Trust
A trust is a way of arranging property for the benefit of other people without giving them full control. Trustees are the legal owners of the property which they hold for the benefit of the beneficiary. Trusts are often used in inheritance tax planning.

Trustee
A person who owns and administers the assets of a trust for the benefit of the beneficiary of a trust.

Withholding Tax
Irrecoverable withholding tax may be payable on certain investment funds, as in some countries withholding tax is deducted from dividends and interest payments.