Part 4 U.K. Savings and investment income

Chapter 9 U.K. Gains from contracts for life insurance etc.

Modifications etc. (not altering text)

C1 Pt. 4 Ch. 9 applied (with modifications) by The Individual Savings Account Regulations 1998 (S.I. 1998/1870), reg. 36 (as added by S.I. 1998/3174, reg. 12 and as amended (6.4.2008) by S.I. 2008/704, regs. 1, 17(4))

C2 Pt. 4 Ch. 9 applied (with modifications) by The Child Trust Funds Regulations 2004 (S.I. 2004/1450), reg. 38 (as amended (6.4.2010) by S.I. 2010/582, regs. 1, 18)

C3 Pt. 4 Ch. 9: power to exclude conferred (with effect in accordance with s. 148 of the amending Act) by Finance Act 2012 (c. 14), s. 61(4) (with s. 147, Sch. 17)

Income tax treated as paid and reliefs U.K.

537 Top slicing relieved liability: two or more chargeable events U.K.

• To calculate an individual's relieved liability for the purposes of section 535(1) for a tax year for which the individual is liable for tax on gains from two or more chargeable events—

  Step 1

  Calculate the total annual equivalent by adding together the annual equivalents for each of the chargeable events, found as specified in step 1 in section 536(1).

  Step 2

  Find the total relieved liability on the total annual equivalent by—

  (a)

   calculating the individual's liability to income tax (if any) on the total annual equivalent, on the basis that—

  •  (i) the total gains from the chargeable events are limited to the amount of the total annual equivalent, F1 ...

  •  (ii) the highest part assumptions apply, and

  • [F2 (iii) in determining the amount of the individual’s personal allowance under section 35 of ITA 2007 (but not the amount of any other relief or allowance), it is assumed that the total gains from the chargeable events are equal to the amount of the total annual equivalent, and]

  (b)

   subtracting the amount of income tax at the [F3 basic rate] on the total annual equivalent which the individual is treated as having paid under section 530(1).

  Step 3

  Multiply the total relieved liability on the total annual equivalent by the total gains charged to tax under this Chapter for the tax year in respect of all the events.

  Step 4

  Divide the result of step 3 by the total annual equivalent.

Textual Amendments

F1 Word in s. 537 omitted (with effect in relation to the tax year 2019-20 and subsequent tax years) by virtue of Finance Act 2020 (c. 14), s. 37(4)(a)(5) (with s. 37(6))

F2 Words in s. 537 inserted (with effect in relation to the tax year 2019-20 and subsequent tax years) by Finance Act 2020 (c. 14), s. 37(4)(b)(5) (with s. 37(6))

F3 Words in s. 537 substituted (with effect in accordance with Sch. 1 para. 65) by Finance Act 2008 (c. 9), Sch. 1 para. 57