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Top slicing relief on life assurance gains

25 August 2020 / Tim Good
Issue: 4758 / Categories: Comment & Analysis
Here we go again

Key points

  • Finance Act 2020 makes two changes to top slicing relief.
  • Personal allowances can be recalculated if relevant for 2019-20 gains.
  • HMRC intends to apply the rules retrospectively.
  • Overpayment relief claims or claims under extra-statutory concession B41 could be relevant.
  • HMRC is applying a stricter interpretation to the new legislation.



In April 2019 the First-tier Tribunal ruled against HMRC in Marina Silver (TC7103) and in March 2020 HMRC withdrew its appeal and paid the taxpayer’s costs in full. On 11 March 2020 the draft clauses for Finance Bill 2020 were published and these included two changes to the rules for calculating top slicing relief on chargeable event gains. The first change in effect reflects the tribunal’s judgment (but with an important caveat – see ‘Even more bad news’ below) and the second change (sensibly) imposes a specific rule for the ordering of allowances...

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