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Debenture. Long term loan to a company, usually at a fixed rate of interest and for a specific term. Debenture holders are creditors of the company. In the event of liquidation debenture holders have a preferential claim on the assets. Debentures are marketable securities.
Declaration of Trust. Written (usually) statement to the effect that certain property is to be held in trust. No specific form is required, provided the intention is clear.
Decreasing Term. A term insurance policy, in which the sum insured is reduced by a fixed amount each year, decreasing to nil at the end of the term.
Deeds of (Family) Arrangement. A formal document used under the terms of the Inheritance Tax Act 1984 to override the directions of a will after death.
Deep Discount Bonds. An investment bond issued at a large discount. The bond does not pay interest, but is repaid at par.
Deferred Annuities. Annuities that commence after a specified number of years or at a specified age (usually on retirement), usually continuing through the policyholder's life.
Deferred Period. A waiting period e.g. under Permanent Health Insurance policies there can be waiting, or deferred periods of between 4 and 104 weeks before the policy begins to pay out. Usually, the longer the deferred period, the lower the premium.
Defined Benefits. Pension schemes that base their final pension calculation on a formula are referred to in this way. Also called final salary schemes.
Defined Contribution. Another term for 'money purchase' pensions. A pension scheme where the final pension will be the result of an agreed premium input, rather than an agreed formula output.
Definitive Deed. Often, occupational pension schemes are ready to run before the formal documentation is ready. Rather than wait, the scheme is launched with an interim trust deed or a declaration of trust. When all the paperwork has been agreed with the various Revenue departments, the Definitive, or final, Deed, may be issued.
Dependent. Someone who is reliant upon others usually for financial support in the terms of financial planning.
Dependant's Pension. One of the options with a pension scheme. Usually pre-determined with a company scheme, but a separate decision with a personal pension.
Deposit. Money on deposit earns interest at a rate relevant to reserves and long term investment conditions. Usually, the interest earned on deposit is not lost, the deposit growing at a slower or faster rate depending on the interest rate, but not reducing in value.
Deposit Administration. An investment option for occupational defined benefit schemes, whereby an agreed amount of interest is credited to the fund with the possibility of a final declaration of a higher figure but backdated over the interest period e.g. 8% declared at the beginning of the year, an additional 2% granted at the end, backdated.
20% Director. A director who has actual or potential control of 20% or more of the voting shares of a company.
Derivatives. Derivative products is the collective term applied to certain types of financial instruments such as futures and options. Their value derives from other commodities, indices or individual shares.
Disability. Also disablement. In terms of critical illness and Permanent Health Insurance policies, a condition that may give rise to a claim on a policy.
Disability Benefit. Certain life policies will pay out if the policyholder becomes permanently disabled. No further benefit is paid on the policyholder's subsequent death. (See also Critical Illness Insurance.)
Discount House. In financial terms, a business that specialises in buying and selling bills of exchange.
Disclaimer. Legal refusal, usually written, to accept responsibility for the action of a third party or an action attributed to the individual concerned.
Disclosure of Information. Also referred to as 'Utmost Good Faith' or 'uberrima fides'. A pre-condition of insurance contracts to disclose all relevant facts to the insurer.
Discretionary Investment Management Agreement. An agreement necessary for managing investments for a third party where there are no directions or supervision.
Discretionary Trusts. A trust in which the trustees may exercise their discretion, within a class of beneficiary, as to whom should receive benefit.
Discretionary Will. A will which confers on the executors overriding powers of appointment in favour of a specified class of beneficiary.
Distributor Fund. An offshore fund that complies with the Revenues rules on distributing most of the gains, usually up to 85%, as dividends, the dividends then being liable to income tax.
Dividend. This is the income you receive as a shareholder from a company. It is a share of the profits made by a company that it has chosen to distribute to its shareholders. Returns vary from year to year depending on the company's profits or operational strategy.
Dividend Waiver. Similar to 'bonus sacrifice' in that this may be a way to increase payments into a company pension scheme i.e. the dividend is waived, and the money thus 'released' is paid into a pension arranged by the company for the benefit of the individual. The dividend must be waived before the dividend is calculated and known.
Domicile. The country that a person considers to be, and treats as, a permanent home and which forms the closest ties. An essential element when dealing with legal and taxation matters.
Domicile of Choice. Determined by personal choice after age 16, and proven by intention to stay and form permanent ties.
Domicile of Dependence. Determined by changes in parents domicile until age 16 (or in Scotland 14 for boys, 12 for girls).
Domicile of Origin. Determined for a child by the parents domicile at the child's birth.
Double Option Agreement. See Cross Option.
Double Taxation. This is what may happen when a person domiciled in country A works in country B. Tax will be deducted in B, and the same income will also feature for tax liability in country A. Most countries have tax treaties, so that provided the Inland Revenue is informed of the tax already paid on income it will not be deducted again.
Dread Disease. See Critical Illness Insurance
Dynamised. Generally refers to increases in pension payments in line with the Retail Price or other relevant Index, and related back over the contributory period.
DSS Department of Social Security
