Important Information if you have recently cashed in an Investment Bond | David Beckman & Co Ltd
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Important Information if you have recently cashed in an Investment Bond

Have you recently received a “Chargeable Event Certificate? (These are issued by the policy provider if you cash in an investment bond)

The Government is passing new tax law to provide clarity on the calculation of top slicing relief on investment bonds.

This is because a taxpayer took HMRC to court and won (the “Silver” Case). It is a sad state of affairs that a taxpayer has to go to such lengths and costs before HMRC legislate to revise the law to make it fair.

Legislation will now be introduced to ensure the taxpayer is entitled to a full personal allowance where the “chargeable event gain” (which is in fact taxed as income), pushes total taxable income above £100,000.

Up until now, HMRC had refused to allow for any personal allowance where the amount of income taxed by virtue of the chargeable event pushed total income above £100,000 (at which point you lose some/all of the personal allowance).

The draft legislation also confirms that, for the purpose of calculating top slicing relief, allowances must be used against all other income before it can be applied to the bond gains.

Do contact us on 01737 844 322 if you have recently encashed an investment bond and /or have received a chargeable event certificate.

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