Personal finance glossary
Plain-English definitions of the jargon you'll hit when working through tax, mortgage, pension, and savings decisions. Each entry links to the calculator and guide that goes with it.
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A
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Additional Rate
The top UK income-tax rate of 45%, charged on income above £125,140 in 2026 — the threshold sits at the point the personal allowance has fully tapered.
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Additional Voluntary Contribution (AVC)
An extra pension payment on top of employer scheme contributions, qualifying for income-tax relief at the saver's marginal rate.
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Adjusted Gross Income (AGI)
Total income minus specific above-the-line deductions — the figure most US tax thresholds (IRA phase-outs, IRMAA brackets, premium tax credits) key off.
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Annual Equivalent Rate (AER)
A standardised gross annual interest rate that accounts for compounding, used to compare savings accounts on a like-for-like basis.
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Annual Percentage Rate (APR)
The total yearly cost of borrowing — interest plus mandatory fees — expressed as a single percentage to make loans comparable.
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Annual Percentage Yield (APY)
The standardised annual rate of return on a US savings or deposit account, accounting for the effect of compounding within the year.
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Approved Retirement Fund (ARF)
A post-retirement investment vehicle that holds your pension pot, lets you draw an income, and passes the residual to your estate.
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Auto-Enrolment
The UK workplace pension system requiring employers to enrol eligible workers into a pension scheme and pay an employer contribution alongside the employee's.
B
C
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Capital Acquisitions Tax (CAT)
Ireland's gift and inheritance tax — a 33% charge on assets received above lifetime tax-free thresholds set by the relationship between giver and recipient.
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Capital Gains Tax (CGT)
A 33% tax on the profit from selling or transferring an asset that has risen in value — investments, second properties, businesses and crypto.
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Capital Gains Tax (Short vs Long-Term)
US federal tax on profit from selling an asset — short-term gains (held ≤1 year) taxed as ordinary income, long-term gains (>1 year) taxed at 0%/15%/20% preferential rates.
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CGT Annual Exempt Amount
The slice of capital gains a UK individual can realise each tax year before Capital Gains Tax applies — £3,000 in 2026, down from £12,300 in 2022.
D
E
F
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FICA (Federal Insurance Contributions Act)
The US payroll tax that funds Social Security (6.2%) and Medicare (1.45%), paid in equal parts by the employee and employer on most wages.
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Flexible Spending Account (FSA)
An employer-sponsored US account that lets employees set aside pre-tax dollars for medical or dependent-care expenses, with a use-it-or-lose-it annual deadline.
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Form 1099
The IRS information return family used to report payments to independent contractors, dividends, interest, and other non-employee income — most commonly the 1099-NEC and 1099-MISC.
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Form W-2
The annual wage and tax statement a US employer sends each employee in January, summarising the prior year's wages and federal/state tax withholdings.
G
H
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Health Savings Account (HSA)
A US tax-advantaged account paired with a High-Deductible Health Plan, offering triple tax benefits — deductible contributions, tax-free growth, tax-free qualified withdrawals.
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Help-to-Buy (HTB)
An Irish tax-relief scheme refunding up to €30,000 of income tax and DIRT paid in the prior four years toward a new-build home deposit for first-time buyers.
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Higher Rate Threshold
The UK income level above which earnings are taxed at 40% — £50,270 in 2026 for England, Wales and Northern Ireland (Scotland uses a different band structure).
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Individual Savings Account (ISA)
A UK tax-free savings or investment wrapper, with an annual subscription limit shared across cash, stocks & shares, innovative finance, and Lifetime ISA variants.
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Itemized Deductions
Specific tax-deductible expenses — mortgage interest, state/local taxes, charitable gifts, large medical bills — claimed on Schedule A when their total exceeds the standard deduction.
L
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Lifetime ISA (LISA)
A UK tax-advantaged savings account for people aged 18–39, with a 25% government bonus on contributions up to £4,000 a year, ring-fenced for a first home or age-60+ withdrawal.
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Loan-to-Income (LTI)
The ratio of a mortgage loan to the borrower's gross annual income — the Central Bank caps this at 4× for most Irish buyers.
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Loan-to-Value (LTV)
The ratio of a mortgage loan to the property's value, expressed as a percentage — the headline metric for how much equity a buyer has and what rate they can get.
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Local Property Tax (LPT)
An annual self-assessed tax on residential property in Ireland, charged on the property's market value with local authority adjustments.
M
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Marriage Allowance
A UK income-tax transfer that lets a spouse or civil partner earning under the personal allowance pass up to £1,260 of unused allowance to a basic-rate partner.
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Mortgage Stress Test
The Central Bank requirement that lenders assess affordability at an interest rate at least 2 percentage points above the offer rate before approving a mortgage.
N
P
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Pay As You Earn (PAYE)
The HMRC system for collecting income tax and National Insurance directly from wages — your employer deducts it before paying you.
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Pay Related Social Insurance (PRSI)
Ireland's social-insurance contribution funding state pension, jobseeker, illness and parental benefits, paid by employees, employers and the self-employed.
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Personal Allowance
The UK income-tax-free band — £12,570 in 2026 — applied before any income tax is charged, tapered to zero for incomes above £100,000.
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Personal Contract Plan (PCP)
A car finance product split into a deposit, monthly payments, and a large optional final 'balloon' payment that you can pay, refinance, or hand the car back to settle.
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Private Mortgage Insurance (PMI)
A US insurance premium charged to borrowers with a conventional mortgage and less than 20% down — protects the lender, not the borrower, and adds 0.3–1.5% of the loan annually.
R
S
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Self-Assessment
HMRC's annual return for people whose income isn't fully settled through PAYE — the self-employed, landlords, high earners, and anyone with untaxed side income.
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Self-Invested Personal Pension (SIPP)
A UK personal pension wrapper that gives the holder full control over the investments inside it, with HMRC tax relief on contributions.
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Social Security
The US federal retirement, disability, and survivor benefit program, funded by FICA payroll tax and paying out monthly benefits based on lifetime earnings.
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Stamp Duty Land Tax (SDLT)
The UK tax on property purchases above the nil-rate threshold, charged on slices of the price at progressive band rates with first-time buyer and additional-property variations.
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Standard Deduction
A flat-dollar reduction in taxable income available to every US filer — $15,000 single, $30,000 married filing jointly in 2026 — used by ~90% of filers.
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Standard Rate Cut-off Point
The income threshold up to which Irish income tax is charged at the 20% standard rate. Income above the cut-off is taxed at the 40% higher rate.
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Student Loan Plan (Plan 1/2/4/5)
The repayment plan a UK graduate sits on — determined by when and where they studied — which sets the income threshold and rate at which student loan deductions are taken from pay.
T
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Tax Bracket (Marginal Rate)
A range of taxable income taxed at a specific federal income-tax rate — the marginal rate is the rate on your last dollar of income, not the rate on your whole income.
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Tax Code
The alphanumeric code HMRC issues each PAYE employee so the employer knows how much personal allowance to apply when calculating income tax.
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Tax Credit
A flat amount that reduces the income tax you owe, applied after the tax is calculated — €1 of credit cancels €1 of tax.
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Traditional IRA
A US individual retirement account funded with pre-tax dollars, where contributions are tax-deductible and withdrawals in retirement are taxed as ordinary income.