There is currently a good deal of confusion over how the Personal Allowance, Personal Savings Allowance and the starting rate band for savings affect the calculation of the tax due on investment bond chargeable gains, and in particular top-slicing relief.
In addition, a recent First-Tier Tribunal (FTT) decision which went against HMRC (but which HMRC may appeal) has further muddied the waters. It would appear that HMRC are currently considering their options with regards to the FTT decision, and one of those options is appealing to the Upper-Tier Tribunal. With regards to customer queries on top slicing relief, HMRC have said that they will continue to apply their current interpretation of the legislation and calculate relief on that basis, however, they are making customers aware that this interpretation has been challenged at the First-Tier Tribunal and they are considering their next steps.
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