(Yet more) Top-slicing changes
paranoidplanner
Member
Last Friday I received an email from Canada Life. I expect many of you did too. The meat of it was thus:
What's changing?
As a result of a recent tax tribunal, the way in which top slicing relief calculations are completed has changed.
The personal allowance could already be reintroduced back into the calculation, if this was reduced or lost for gains arising from 2018/19. Now, you can also add back in the personal savings allowance, as well as the starting rate band for savings income if this is available for gains arising from 2020/21 onwards.
There's a link to a full article which can be downloaded as a PDF here:
Canada Life Technical Eye - Any way you (Top) Slice it: further changes to calculations.
The PDF states that the changes actually apply from 2021/22, not 2020/21.
What neither the email nor the PDF mention is what recourse bondholders might have who paid too much tax on chargeable events in 2021/22 and 2022/23. Can these now be recalculated and any overpaid tax reclaimed?
Comments
Aberdeen appear to have answered this:
Change to top slicing offers more relief for some.
How do I claim relief?
The PSA amount within the top slicing relief calculation will be based on the average gain on all chargeable gains arising after 6 April 2021.
This means any gains made in the current tax year should automatically be calculated using the revised basis when a self-assessment tax return is submitted.
Clients have until 31 January 2024 to submit a tax return for gains arising in 2022/23 tax year. This means they still have time to submit their return using the new calculation basis.
HMRC have yet to confirm if gains from 2021/22 tax year submitted on the old basis will be automatically recalculated and refunds issued where it results in additional top slicing relief. Therefore, clients with gains relating to this tax year may wish to contact HMRC with a revised self-assessment return if they believe they may be entitled to a refund.
Any requests to have tax recalculated based on beneficial ordering will be limited to gains in the 2019/20 tax year providing the chargeable gain arose before 11 March 2020 and must be made before 6 April 2024.