International Financial Glossary INTM539000 - Glossario Termini Finanza Internazionale
An injection of equity into a company, in cash or in kind, which increases the equity reserves of a company without being linked to shares, and which does not generally constitute taxable income for the company or earn a return for the contributor.
Its UK accounting status is unclear, and it can be useful to define status and treatment for the period of any thin cap agreement.
Capital distribution Distribution of funds not derived from the profits of a company, being either a return of the original subscribed capital or derived from a sale of capital assets.
The amount of equity in a company, or the value of the equity, as in market capitalisation. Expense may be capitalised e.g. R&D costs treated as an intangible asset.
Under Section 773 of the Companies Act 2006, when a company buys back its own shares using either company’s profits or a fresh issue of shares, the amount by which the company’s issued share capital is diminished on cancellation of the shares must be transferred to a reserve called the ‘capital redemption reserve’.
This counterbalances the reduction in equity caused by the cancellation of the repurchased shares.
Accounting method in which only cash receipts and cash expenditure are used in computing taxable income.
Method used since 1997 to determine the classification of a domestic or foreign business as a corporation, a partnership or a “disregarded entity” for US tax purposes.
A disregarded entity is treated as a branch or division of its owner, not as a taxable entity in its own right The term comes from the practice of ticking a box on an Internal Revenue Service Form 8832 to opt for a particular treatment.
If no election is made, default rules apply based upon the liability, and the number of members/owners.
A term used for variable-rate debt, setting a range within which the interest rate may vary between a maximum (the “cap”) and a minimum (the “floor”).
Unsecured, short-term loans (less than a year) issued by companies. The debt is usually sold at a discount to face value, and then redeemed at face value.
The funds are typically used for working capital, rather than fixed assets such as a new building. They can serve as a cheaper alternative to a bank overdraft.
A fee charged annually by the lender for holding funds available, whether they are used or not, for example where a company has a facility of £5m but has only drawn £2m.
The lender charges for the continuing availability of the remainder. If a transfer pricing adjustment reduces the size of a company’s facility, there should be a corresponding reduction in the fee.
Transaction involving one or more intermediate or “conduit” companies, used at times to reduce withholding tax.
A company in a zero withholding territory is placed between the UK and the true lender, who is either in a country with a residual rate of tax (e.g. 10%) or in a tax haven.
Such arrangements can be challenged. (See also back-to-back loan, treaty shopping and beneficial ownership)
A bond which gives the holder the option of either receiving repayment of the principal at maturity, or of converting the debt into shares (either in the issuing company, or some other company).
Sometimes referred to as hybrid capital.
The nominal annual rate of interest receivable on a fixed income security, expressed as a percentage of the principal value, usually paid to the holder of the security annually, semi-annually or quarterly, depending on the type of security.
The term is also used more loosely to refer to any income-like return on an investment.
Former exploitation of the difference in the UK between the tax treatment of interest and accruing discount, eliminated by anti-avoidance and loan relationships legislation.
Generally, separating an interest-bearing security into separate components: the right to receive the principal (called the principal strip) and the right to receive interest (a series of coupon strips).
The separate components are repackaged and can be traded individually.
Sale of a bond by a resident to a non-resident immediately before the annual interest is due, to avoid paying tax on the interest.
The non-resident sells the bond back to the resident at a lower price and the ‘tax saved’ is divided between the two.
This is an estimate of the credit worthiness of a person, a company or a state, an indicator of risk to potential investors.
A rating, expressed in letters and +/- (for example “BB-“) heavily influences how much can be borrowed and what it will cost.
The result of in-depth study by a ratings agency, it should not be confused with credit scorings carried out as a limited exercise on proprietary software and often encountered as part of a thin cap report.
AVVERTENZE D'UTILIZZO: Il presente glossario contiene la definizione dei termini indicati con riferimento alla Finanza Internazionale.
La spiegazione di ciascuno dei termini indicati in questo glossario è di carattere meramente orientativo e priva di valore legale; si raccomanda, quindi, di tenere conto del contesto e dell'evento in cui essi vanno applicati, in quanto il significato loro attribuito potrebbe differire rispetto a quello qui rappresentato.
AVVERTENZE LEGALI - Il contenuto del sito web "www.dottoricommercialistilondra.com" è di carattere puramente divulgativo e, pertanto, non costituisce offerta diretta al pubblico e non intende in alcun modo favorire reati fiscali, riciclaggio di denaro, esportazione di capitali, terrorismo ed altri illeciti. Nessuno dei nostri servizi è svolto direttamente in Italia; su richiesta, è possibile unicamente il contatto con professionisti regolarmente abilitati, nostri referenti, dietro rilascio di fattura e regolare pagamento anticipato. La navigazione di questo sito web è subordinata alla conoscenza e piena accettazione delle nostre condizioni di erogazione dei servizi e dell'informativa sul trattamento dei dati.
DOTTORI COMMERCIALISTI LONDRA Ltd - Costituzione e Gestione Società Private Limited Company Ltd, Società Inglesi, Apertura Conti Correnti a Londra, Dottore Commercialista Londra, Studio Dottori Commercialisti Londra, VAT, Annual Return, Corporation Tax. > Glossario > International financial glossary INTM539000 Glossario Termine Termini Finanza Internazionale INTM539000 >