Bond gains and the Personal Allowance
I've been reading up on this as I'm doing some work for a client who has an over £100,000 onshore bond gain.
It was my understanding that the Silver case had potentially shaken up everything we ever believed about how bond gains interact with the Personal Allowance, in that the top-sliced gain would be used, not the total gain, when determining the Personal Allowance available for other income.
Having looked at HMRC, Standard Life Techzone and Pru's various factsheets, I'm more confused than ever! These seem to say that HMRC as now used the decision from Silver to amend the longhand method of calculating bond gain tax to allow the Personal Allowance to be used in the top slicing calculation even where the total gain takes total income over £100,000. Fine. However, none of them are totally clear on how this affects allowances available for other income, specifically the Personal Allowance.
I found one Pru Q&A that states that the Personal Allowance could still be reduced or lost due to the total gain even where top slicing results in no tax on the gain itself but nothing else that backs this up or explains how the gain calculation and tax on other income calculations interact.
Can anyone help please?
Thanks in advance!