HMRC have been making recalcations for Top Slicing Relief. Some taxpayers now need to submit an amended 2018-19 tax return to benefit from these changes.

Following the First Tier Tribunal decision in Marina Silver v HMRC [2019] TC07013, changes were made to Top Slicing Relief (TSR) in Finance Act 2020.

It had previously been confirmed that: 

On 28 August 2020, HMRC undertook the 2018-19 recalculation process and have issued revised calculations to taxpayers where additional relief was due. These revised calculations apply to tax returns received by HMRC on or after 28 November 2019, as HMRC’s power to amend returns only extends to nine months following receipt of the return.

Taxpayers with chargeable event gains who submitted their 2018-19 tax returns before 28 November 2019 must submit an amended return with a revised TSR calculation in order to benefit from the Finance Act 2020 basis of calculation.

HMRC are holding a Talking Points webinar in respect of TSR on 22 October 2020 from 12:45 to 13:45. This aims to raise awareness of the changes to TSR and will include guidance on the years impacted and examples.

Taxpayers who are affected by the Finance Act 2020 change in TSR calculation for 2019-20 will need to file a paper tax return under online filing exclusion 116.

Links

Investment bonds: A tax guide

Top Slicing Relief: How you slice it
Top Slicing Relief (TSR) applies to withdrawals from certain types of investment bond and is intended to adjust the tax liability to reflect the savings which would have been available if the withdrawals had been made over time instead of as a single lump sum.

Self Assessment 2019-20 returns: Online filing exclusions
Many taxpayers are unable to file their Self Assessment returns for the year ending 5 April 2020 online due to software specification issues from HMRC.