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Term Loan: a loan for a defined period, where repayment cannot be demanded (provided that the terms are complied with).

Thin Capitalisation: in tax terms, a UK company is thinly capitalised when it has more debt than it either could or would borrow acting purely in its own interests, leading to the possibility of “excessive” interest deductions (i.e. more than would arise if the borrower was acting at arm’s length from the lender or guarantor). See INTM540000 and INTM570000 onwards.

Tier 1 Capital: the core measure of a bank’s or other regulated financial institution’s financial strength from regulator’s point of view. It consists primarily of shareholders’ equity but may also include preferred stock that is irredeemable and non-cumulative and retained earnings. It forms part of a bank’s or other financial institution’s regulatory capital.

Tier 2 Capital: a regulator’s measure of a bank or other regulated financial institution’s financial strength with regard to the second most reliable form of financial capital, consisting of undisclosed reserves, revaluation reserves, general provisions, hybrid instruments and subordinated term debt. It forms part of the bank or other financial institution’s regulatory capital.

Treasury Bonds (T-Bonds) Treasury Notes: a US government debt security issued by the Treasury Department. The term Treasury Bond (T-bond) is applied to such a security with a maturity of 10 years or more; shorter-term US Treasuries (USTs) are referred to as Treasury Notes.

Tranche: a tranche is literally a slice (French origin). It may refer to a single issue of bonds or shares out of a larger total, differentiated by date of issue or terms, an instalment of a larger whole, or an identifiable layer.

Treaty Shopping: taking advantage of the network of double taxation agreements (DTAs) to obtain a more advantageous position than the facts warrant. For example, even after clearance Country A levies withholding tax at 15% on interest paid to Country B, per the DTA between A and B. Countries A and B have DTAs with C which have nil withholding tax clauses. By routing the loan through a company in Country C, companies in Countries A or B can avoid withholding tax. Many UK treaties contain anti-treaty shopping clauses to prevent this, and most require that the applicant for clearance should be beneficial owner of the income. C is unlikely to be the beneficial owner if it is part of an arrangement between A and B.