← Calculators/Tax year 2026/27·Last reviewed 20 Jul 2026

Chargeable event gain calculator

The chargeable event calculator for the gain itself: raw gain and slice before TAR, plus the 5% allowance position. Tax-driven withdrawal comparisons and segment optimisation require confirmation that no TAR is due.

Free, no sign-up. Runs the same engine and versioned tax-year config as the signed-in suite — the pension and bond calculation workbench UK paraplanners use to produce compliance-annex PDFs. Your calculator figures stay in this browser unless you choose to share or rerun them in the signed-in workbench. How we verify the numbers.

— In short

A chargeable event gain — the chargeable gain on a UK investment bond — starts with the statutory gain arithmetic. The raw gain shown here is before any time-apportioned reduction (TAR).

On a full surrender it is the surrender value, plus all withdrawals previously taken, minus the total premiums paid and any gains already taxed on earlier excess events.

The gain is then divided by the complete policy years to give the annual equivalent — the raw “slice” before TAR.

TAR can apply to qualifying onshore and offshore policies, and UK residence alone does not settle whether it is due. The raw gain remains available, but the tool releases no final tax, TSR, withdrawal-comparison or segment-optimisation figure until you confirm that no TAR is due after checking relevant residence, beneficial ownership or assignments, security, and trust or estate history.

Next step

Worked out the gain? Calculate top-slicing relief on it — this page stops at the gain and the slice.

— Inputs · 5

From the certificate.

Enter the surrender value, premiums, prior withdrawals, earlier excess gains and complete policy years. The working shows the gain and its annual equivalent.

Example figures. Select any field and the interactive calculator opens here, keeping them.

Time-apportioned reduction check and withdrawal planner — available once the interactive calculator opens.

For planning and illustration purposes only. Verify all inputs against source documents. This tool does not constitute financial or tax advice.

Print this quick illustration now. Signed-in users can add a client or file reference before saving it as a PDF — the branded compliance annex, with the full working and HMRC references on every page, comes from the signed-in workflow.

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More than one bond, or a certificate to reconcile? The bond workbench handles multiple bonds, the final-year rule and certificate reconciliation. Final tax comparisons require confirmation that no TAR is due.

— How it's calculated

The raw gain on full surrender — before TAR

On a full surrender the chargeable event gain is the surrender value, plus all withdrawals previously taken, minus total premiums paid and minus any gains already taxed on earlier excess events. A negative result is a deficiency, not a gain — deficiency relief may apply instead. The figure produced at this stage is before any TAR.

IPTM3505 (full surrender) · ITTOIA 2005 s.491

Resolve TAR before using tax-driven comparisons

TAR can affect qualifying onshore as well as offshore policies. Whether it is due can depend on relevant residence, beneficial ownership or assignments, rights held as security, and trust or estate history, so UK residence throughout the policy term alone does not settle the question. This tool does not calculate TAR: raw gain arithmetic stays available, while final tax, TSR, comparison and optimisation outputs require confirmation that no TAR is due.

IPTM3731 · IPTM3732 · IPTM3733 · IPTM3735

The 5% tax-deferred allowance

Each policy year you may withdraw 5% of the premiums paid without an immediate chargeable event — unused allowance accumulates, and the pool caps once cumulative allowances reach 100% of premiums (the 20-year point). Withdrawals beyond the cumulative allowance trigger an excess event taxed in that year. The allowance defers tax; it does not remove it — everything washes through the final surrender computation.

IPTM3540 (part surrenders, the 5% allowance) · ITTOIA 2005 s.507

Segment surrender

Most bonds are written as a cluster of identical mini-policies (commonly 100 or 1,000). Surrendering K whole segments crystallises K/N of the total gain as a final event on those segments — often cheaper than a part-surrender excess for the same cash. The comparator prices the routes side by side only after confirmation that no TAR is due.

IPTM3520 (segment surrender as separate policies)

Who is taxed on the gain — individual or trustees

The raw gain before TAR uses the same s.491 arithmetic whoever holds the bond: premiums, withdrawals and surrender value. TAR can still depend on beneficial ownership, assignments, security, and trust or estate history. Who pays the tax on the resulting gain also differs. The withdrawal comparator and segment planner above price the tax for an individual chargeable person: top-slicing relief is given only where an individual is liable, and the personal allowance, personal savings allowance and starting rate for savings are individual reliefs. Where UK trustees are the chargeable persons the whole gain is charged at the trust rate with none of those reliefs — run that case on the onshore or offshore bond tax calculator, which takes the chargeable person as an input. Where the trust is settlor-interested and the settlor is the chargeable person, the individual treatment applies to the settlor.

ITTOIA 2005 s.535(1) (relief where an individual is liable) · s.467 · IPTM3250 / IPTM3260

— How to calculate a chargeable event gain on an investment bond

Step 1
Take the surrender value
Start from the surrender value of the bond, or its value at the chargeable event.
Step 2
Add previous withdrawals
Add any withdrawals previously taken across the life of the policy.
Step 3
Deduct premiums and earlier gains
Subtract total premiums paid and any gains already taxed on earlier excess events.
Step 4
Read the gain
The result is the raw chargeable event gain before TAR; a negative result is a deficiency, not a gain.
Step 5
Find the slice
Divide the raw gain by N — the number of complete periods of 12 months from the date the policy started, which IPTM7560 distinguishes from the insurance-year count — to get the annual equivalent before TAR.
Step 6
Resolve TAR before using tax-driven outputs
The raw gain remains available. Final tax, TSR, comparison and optimisation figures require confirmation that no TAR is due after checking relevant residence, beneficial ownership or assignments, security, and trust or estate history.

— Worked example

Raw position before TAR · full surrender · £150,000 surrender value · £100,000 premiums · 6 complete years

Raw gain before TAR (surrender + withdrawals − premiums − previous gains): £50,000
Raw annual equivalent / slice before TAR (gain ÷ 6): £8,333.33
Cumulative 5% tax-deferred allowance (5% × 6 years): £30,000
Allowance remaining (nothing withdrawn): £30,000

Computed live by the same engine the tool above runs. The raw gain and slice remain available before TAR. Final tax, TSR, withdrawal-comparison and segment-optimisation figures are unavailable unless you confirm that no TAR is due; this tool does not calculate or apply TAR.

— Frequently asked questions

How is a chargeable event gain calculated on a full surrender?

Take the surrender value, add any withdrawals previously taken across the life of the policy, then subtract the total premiums paid and any gains already taxed on earlier excess events. The result shown by this tool is the raw chargeable event gain before TAR. A negative result is a deficiency, not a gain — deficiency relief may apply instead.

What is the 5% allowance on an investment bond?

Each policy year you may withdraw 5% of the premiums paid without an immediate chargeable event. Unused allowance accumulates, and the pool caps once cumulative allowances reach 100% of premiums (the 20-year point). Withdrawals beyond the cumulative allowance trigger an excess event taxed in that year. The allowance defers tax; it does not remove it — everything washes through the final surrender computation.

What is the difference between part surrender and segment surrender?

A part surrender is taxed on the 5% allowance / excess-event basis. A segment surrender crystallises whole mini-policies: surrendering K of N segments crystallises K/N of the total raw gain as a final event on those segments — often cheaper than a part-surrender excess for the same cash. The withdrawal comparator prices all three routes side by side only after confirmation that no TAR is due.

Is the chargeable event gain the same as the slice?

No. The raw slice — the annual equivalent before TAR — is the raw gain divided by N, the number of complete periods of 12 months from the date the policy started. IPTM7560 is explicit that these are periods of 12 months and not insurance years, so an anniversary-based count can differ. This chargeable event calculator produces both: the gain drives the tax computation and the slice drives the relief computation, once the TAR position has been resolved.

Can an investment bond show a taxable gain even if it lost money?

Yes — the 5% allowance trap. Withdrawals above the cumulative 5% allowance trigger an excess event that is taxed in that year, even if the bond is worth less than the premiums paid. The position is reconciled at final surrender, but the interim charge is real.

Is the gain different if the bond is held in trust?

The raw gain before TAR uses the same surrender-value, withdrawal, premium and earlier-gain arithmetic whoever holds the bond (ITTOIA 2005 s.491). TAR can still depend on beneficial ownership, assignments, security, and trust or estate history, and the tax on the resulting gain can differ. The tax figures in the comparator and segment planner assume an individual chargeable person and remain unavailable unless no TAR due is confirmed; run a trustee case on the onshore or offshore bond tax calculator.

Does it work for onshore and offshore bonds?

The raw gain before TAR is computed using the same arithmetic for both. TAR can apply to qualifying onshore and offshore policies, while the onshore bond's 20% tax credit applies later in the tax computation. The raw gain remains available without a TAR confirmation; final tax, TSR, comparison and optimisation figures do not.

Does this calculator apply time-apportioned reduction?

No. It shows the raw gain before TAR. UK residence alone does not settle whether TAR is due: check relevant residence, beneficial ownership or assignments, security, and trust or estate history. Final tax, TSR, comparison and optimisation outputs are available only after confirming that no TAR is due.

— Related

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Put this calculation in the client file.

ParaplanAI is the paraplanner's calculation workbench: the same engine as this free tool, plus document extraction, full multi-event workflows, and a branded compliance annex PDF with the step-by-step working and its HMRC references — the file a compliance officer signs.