Part 4Savings and investment income

C1C2C3Chapter 9Gains from contracts for life insurance etc.

Annotations:
Modifications etc. (not altering text)
C1

Pt. 4 Ch. 9 applied (with modifications) by The Individual Savings Account Regulations 1998 (S.I. 1998/1870), reg. 36 (as added by S.I. 1998/3174, reg. 12 and as amended (6.4.2008) by S.I. 2008/704, regs. 1, 17(4))

C2

Pt. 4 Ch. 9 applied (with modifications) by The Child Trust Funds Regulations 2004 (S.I. 2004/1450), reg. 38 (as amended (6.4.2010) by S.I. 2010/582, regs. 1, 18)

C3

Pt. 4 Ch. 9: power to exclude conferred (with effect in accordance with s. 148 of the amending Act) by Finance Act 2012 (c. 14), s. 61(4) (with s. 147, Sch. 17)

Income tax treated as paid and reliefs

535Top slicing relief

1

An individual is entitled to relief under this section for a tax year if—

a

the individual's liability for the tax year, as calculated under subsection (3), exceeds

b

the individual's relieved liability for the tax year, as calculated under—

  • section 536 (top slicing relieved liability: one chargeable event), or

  • section 537 (top slicing relieved liability: two or more chargeable events).

2

The relief is given by a reduction in or repayment of income tax equal to the excess.

F12A

If the relief is given by a reduction in income tax, it is given effect at Step 6 of the calculation in section 23 of ITA 2007.

3

An individual's liability for a tax year for the purposes of subsection (1)(a) equals TL — F3BRL , where—

  • TL is the amount of the individual's total liability to income tax on income charged to tax under this Chapter for the tax year, calculated on the basis that no relief is available under this section and the highest part assumptions apply, and

  • F3BRL is the amount of income tax at the F4basic rate that the individual is treated as having paid under section 530(1) for the tax year.

4

For the purposes of subsection (3) and sections 536 and 537, the highest part assumptions, in calculating liability to income tax on an amount, are that—

a

the amount is the highest part of the individual's total income for the tax year, and

b

any provision directing any other amount to be treated as the highest part is ignored.

5

For the purposes of this section and sections 536 and 537, an individual's total income is treated as not including any amount which—

a

is charged to tax under Chapter 4 of Part 3 (profits of property businesses: lease premiums etc.) as the profits of a UK property business, or

b

counts as employment income under section 403 of ITEPA 2003 (payments and benefits on termination of employment etc.).

6

For the purposes of this section and sections 536 and 537—

a

any chargeable event under section 525(2) (chargeable events where annual personal portfolio bond calculations show gains),

b

any gain treated as arising on the occurrence of such an event, and

c

the amount of any liability to income tax arising on such a gain,

are ignored.

F27

For the purposes of the calculations mentioned in subsection (1) any relief under Chapter 2 or 3 of Part 8 of ITA 2007 (which relate to gift aid and other gifts to charities) is ignored.