My client had an insurance bond with Standard Life which she encashed in 2017-18. On HMRC's calculation the gain put her income well above £100k thus wiping out her personal allowance and greatly increasing her income tax liability. She has sent me a note from the insurance company referring to the "Silver" FTT case, setting out the current position and confirming that as yet there is no indication of a change in approach by HMRC to the tax liability calculation of pre 2020 budget gains. She has asked as to her options. Those are clear and so I do not propose to rehearse them here. My question is twofold, "Have I missed anything recently and if not does anyone have any inclination or knowledge of anything in the pipeline as to a change in approach by HMRC to those pre 2020 budget gains?"
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I haven't got anyone affected - but did the taxpayer not win and HMRC declined to pursue it further, largely on the grounds of being wrong ?
Whilst this is big bucks for any taxpayer in that position, I would imagine it's small beer in HMRC terms.
I put in a protective claim where the difference to my client between losing the personal allowance and the new approach was £38k in tax, back in August(?) last year when the original tribunal decision was reached. I sent in a further claim in February after HMRC announced the change in legislation. I have still heard nothing from HMRC, but did chase them again last week.
My client had a CEG in the 2018/19 tax year and we made a manual amendment to the return (before the budget announcement). HMRC have now made the amendment resulting in a £52,750 refund to our client.
There was no covering letter but the narrative on the amended calculation states: "We have calculated your Top Slicing Relief (TSR) in line with changes brought about by the published March 2020 budget. The revision provides for personal allowances to be recalculated for the purposes of the TSR calculation and clarifies that the highest part assumption rules will apply within the TSR calculation."
I haven't seen any general HMRC guidance on a change of stance for pre-budget 2020 gains but this appears to give a green light for other to pursue claims already or yet to be made.
Will be interested to hear if others have had any similar or different response from HMRC.