New queries, issue 4666

Soft option

Chargeable event gains and the notional tax credit.

I have a client whose income for 2017-18 can be summarised as follows.

• Earned income (pension) £3 811
• Rental income £10 352
• UK dividends £310
• UK interest £30
• Chargeable event gain £1 140

My tax software calculates the tax due as £532.60 and gives no credit for the £228 notional tax on the chargeable event gain. I have queried this with the software supplier and it notes that since the gain falls within the 0% starting rate the notional tax credit is not available.

However ITTO1A 2005 s 530 mentions that the available notional tax credit is not repayable (s 530(2)) and is reduced by (s 530(3)) deductions under step 2 or 3 of the...