Calculating top slicing relief on a chargeable event gain
This briefing note has been designed to help you understand how top slicing relief is calculated for onshore and offshore bonds where an individual is assessed for tax on the chargeable event gain (CEG).
This briefing note has been designed to help you understand how top slicing relief is calculated for onshore and offshore bonds where an individual is assessed for tax on the chargeable event gain (CEG).
Individual taxpayers may suffer extra tax by being charged in a single year on gains that have accrued over a period of time.
Top slicing relief may assist. It allows chargeable gains to be spread over the number of complete years the bond has been in force to recognise the fact that the chargeable gain has accrued over the whole period the bond was in force and not merely in the tax year in which tax is to be assessed on the chargeable gain.
Top slicing relief may still be of benefit even if the chargeable gain does not move the taxpayer into a higher rate tax bracket due to the effect of the personal savings allowance and the starting rate for savings band.