Neil MacGillivray: The Budget's good news on gains

Top-slicing

clock • 3 min read

Tucked away in this year’s Budget was quite an important change in relation to the taxation of life insurance bonds, writes Neil MacGillivray, which could spell good news for many…

The amendment to the legislation was driven by the decision in the recent First‑Tier Tribunal case of Marina Silver v The Commission for HMRC (2019) UKFTT 0263 (TC), and transforms how top-slicing relief impacts on an individual's personal allowance. Where an individual's adjusted net income exceeds the limit of £100,000, their personal allowance is reduced by £1 for each £2 above this limit. So, for tax year 2020/21, if an individual's adjusted net income exceeds £125,000, they will lose their £12,500 personal allowance in its entirety. It has long been HMRC's view that, when working...

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