Top slicing relief calculation was generous but correct

Mr Young died in March 2018. He had held life insurance policies in connection with which a chargeable event gain arose. The taxpayer – his representative – submitted the 2018-19 tax return claiming top slicing relief. HMRC disagreed with the calculations and reduced the relief. The taxpayer appealed.

The First-tier Tribunal noted that in Silver (TC7103) the tribunal had considered that it was necessary when performing the calculation to determine a hypothetical liability on the assumption that the chargeable event gain was an annual fraction of the total gain. The issue in the instant case was the basis on which that hypothetical calculation was to be carried out. The taxpayer argued that before the FA 2020 amendments there was no basis to exclude the provisions of ITA 2007 s 25(2) when performing the hypothetical calculation. Giving effect to s 25(2) would...