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Chargeable Events & Personal Allowance

Should the personal allowance be used in the top slicing calculations?

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This is my first question on this forum therefore apologies if I am answering a common thread (which I have missed).

A client of mine has a single chargeable event on an offshore bond. The gain is £60,000 over 3 complete years. They have no other income in the year. I am happy with all of the calculations other than "Step 2" of ITTOIA 2005, s536. From reading the legislation, I believe that the personal allowance and personal savings allowance form part of the calculation in the Annual Equivilant however my software is suggesting otherwise.

Anyone have experience with this?

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15th Mar 2019 18:24

Are you hoping that the tax credit will be repayable ?

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15th Mar 2019 21:12

It’s offshore so no notional tax.

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16th Mar 2019 05:48

Have a look at Online filing exclusion 81, this talks about the starting rate and the PSA not being taken into account whereas it should be.
HMRC are meant to be doing a 'recovery exercise' to correct it however believe that software may still give the original (incorrect) result.

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