Readers' forum: Soft option

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; and a chargeable event gain of£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 calculation under ITA 2007 s 23 (s 530(4)). Having reviewed ITA 2007 s 23 I see nothing that suggests any reduction should be...