Repayment claims for top slicing relief

Key points

• Taxpayer’s appeal against HMRC’s top slicing calculation is allowed.
• The chargeable event gain is taken into account in calculating the entitlement to personal allowances in ITA 2007 s 35.
• The tribunal’s view was that HMRC’s approach was not in accordance with parliament’s intention.
• If tax has been overpaid in previous years consider a repayment claim and refer to ESC B41.
• The decision could affect many taxpayers.
• HMRC is expected to appeal the decision.

On 18 April 2019 judgment was delivered in the First-tier Tribunal case Marina Silver (TC7103 at tinyurl.com/y5apz6ju). Judge Barbara Mosedale (sitting with member Helen Myerscough) allowed the taxpayer’s appeal against HMRC’s calculation of top slicing relief on a chargeable event gain.

The facts are simple enough. In May 2015 Mrs Silver surrendered a life insurance bond and the insurance company issued a chargeable event certificate showing a gain of £110 721.93. The bond term was 21 years...