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GAAP (Generally Accepted Accounting Practice): UK GAAP is not formally defined, but would be understood to include mandatory guidance, such as Financial Reporting Standards, relevant company law, and the Listing Rules. UK GAAP also includes other guidance such as Statements of Recommended Practice, and other established practice which may not be set out in mandatory guidance, but would be generally accepted by the UK accountancy profession.

Gearing: gearing measures the extent to which a company is funded by debt. It is commonly the ratio of the debt in a company’s balance sheet to its equity. Alternatively, it is sometimes expressed as the ratio of the debt to the balance sheet total (the sum of debt and equity). Also called leverage in the US and some other countries.

Gearing up: gearing in an active sense, describing a situation in which the ratio of debt to equity is increased.

Gilt-Edged Bond, or Gilt: a gilt-edged security; sterling denominated loan stock issued by the UK Treasury, and backed by the credit of the UK government.

Gross payment of interest: in a thin cap context, this has significance as the payment of UK source yearly interest to an overseas recipient without deducting and accounting for income tax. Where deduction is required by CTA09/S874 (previously ICTA88/S349), interest will be due on unpaid tax under TMA70/S87.

Group Finance Company: wholly-owned group subsidiary that borrows funds, from within and often outside the group, to lend on to affiliates. It may also perform a range of services, from acting as a simple conduit for group money to a sophisticated treasury operation.

Guarantee: in financial terms, an agreement to take responsibility for all or part of the debt of another person. Intra-group guarantees are ignored in assessing the borrowing capacity of a company, and no deduction for a guarantee fee can exceed the reduction in arm’s length finance costs which it produces.