← Calculators/Tax year 2026/27·Last reviewed
Onshore bond tax calculator
The tax on one onshore investment bond's chargeable-event gain — added to income as savings income, moderated by top-slicing relief, then reduced by the deemed 20% basic-rate credit onshore bonds carry.
Free, no sign-up. Runs the same engine and the same versioned tax-year config the signed-in suite uses — nothing leaves your browser. How we verify the numbers.
Gain, years, income.
From the certificate, or the chargeable-event-gain calculator.
Complete policy years to the event — used to slice the gain.
Salary, pension, self-employment, rental — gross, before the personal allowance. Excludes the bond gain.
Don't have the gain yet? Work it out on the chargeable event gain calculator and bring the figure here. Uses the 2026/27 versioned tax-year config.
— In short
An onshore bond's chargeable-event gain is added to your income as savings income; top-slicing relief moderates the effect of a multi-year gain landing in one tax year; and a deemed 20% basic-rate credit is set against the tax for the tax already treated as paid inside the fund. This tool gives the tax on this one gain — not the relief figure alone (see the top-slicing relief calculator), nor which wrapper to choose in future (see the wrapper tax comparison).
— How it's calculated
The gain is taxed as savings income
A chargeable-event gain on an onshore bond is not a capital gain — it is treated as savings income of the year the event falls in, sitting above other income but below dividends in the band stack. It is added to the member's income in full; the personal savings allowance and the starting rate for savings can apply to it, and the gain can itself taper the personal allowance once adjusted net income passes £100,000.
IPTM3810 (onshore gains) · ITTOIA 2005 s.465–465B
Top-slicing relief
A gain that built up over several years is charged in a single year, which can push it through the higher or additional-rate threshold. Top-slicing relief compares the tax on the whole gain with the tax on the annual-equivalent “slice” (the gain divided by the complete policy years) scaled back up — reducing the liability where the slice falls in a lower band than the whole gain. The personal savings allowance and starting-rate band are recalculated at the notional slice income for gains from 6 April 2021 (the post-2021/22 IPTM3820 recalculation).
ITTOIA 2005 s.535–537 · IPTM3820 · HMRC Agent Update 83 (2021)
The onshore 20% basic-rate credit
An onshore bond's fund suffers tax internally, so the holder is treated as having already paid basic-rate tax on the gain. A deemed 20% basic-rate credit — restricted to the gain less any personal allowance set against it — is set against the tax on the gain. A basic-rate taxpayer therefore often has no further income tax to pay; a higher or additional-rate taxpayer pays only the excess above basic rate, after top-slicing relief. The credit cannot create a repayment.
— Worked example
- Chargeable event gain
- £80,000.00
- Annual equivalent / slice (gain ÷ 8)
- £10,000.00
- Top-slicing relief
- £2,343.00
- Deemed 20% basic-rate credit (onshore)
- £16,000.00
- Tax on this gain, after relief and credit
- £14,400.00
Computed live by the same engine the tool above runs. The identical case on an offshore bond shares the gain, slice and top-slicing relief — but with no basic-rate credit the tax on the gain is higher by the credit amount. Compare it on the offshore bond tax calculator.
— Frequently asked questions
How is tax on an onshore bond gain calculated?
The chargeable event gain is added to your income as savings income for the year of the event. Top-slicing relief is applied to moderate a multi-year gain landing in one year, then a deemed 20% basic-rate credit is set against the tax for the tax already treated as paid inside the fund. The result is the additional income tax the gain causes; the credit cannot create a repayment.
What is the 20% basic-rate credit on an onshore bond?
An onshore bond’s fund is taxed internally, so the holder is treated as having already paid basic-rate tax on the gain. A deemed 20% basic-rate credit — restricted to the gain less any personal allowance set against it (ITTOIA 2005 s.530(3)–(5)) — is set against the tax on the gain. A basic-rate taxpayer often has no further tax to pay; a higher-rate taxpayer pays the excess above basic rate after top-slicing relief.
Do basic-rate taxpayers pay tax on an onshore bond gain?
Often not. Because the deemed 20% basic-rate credit matches the basic-rate liability, a gain that stays within basic rate after being added to income — with top-slicing relief where a multi-year gain would otherwise push into higher rate — frequently leaves no further income tax to pay. A gain large enough to cross into higher or additional rate does produce a charge on the excess.
Is an onshore bond gain a capital gain?
No. A chargeable event gain is charged to income tax as savings income under the chargeable-event regime (ITTOIA 2005 s.461–465), not to capital gains tax. It uses the personal savings allowance and starting rate for savings rather than the CGT annual exempt amount, and it counts towards adjusted net income for the personal-allowance taper.
What is the difference between onshore and offshore bond tax?
The gain is computed the same way for both, and both get top-slicing relief. The difference is the credit: an onshore bond carries a deemed 20% basic-rate credit for tax paid inside the fund, while an offshore bond rolls up gross and carries no credit, so the whole gain is taxed at your marginal rate. For the same gain, the offshore tax is higher by the credit amount.
— When you're ready
More than one gain in the same tax year, or a certificate to reconcile? The bond workbench handles multiple gains, the final-year rule and certificate reconciliation.
With a free account, the same engine runs inside the workbench:
- save the calc to a client file, with the full replayable audit trail
- export the branded compliance annex PDF — full working, legislative references, config version
- multi-gain, multi-scheme and prior-year history the single-screen tools don't take
- upload statements and certificates — the figures are extracted for your review
Free plan: 3 calcs / month · no card required · no time limit. Unlimited on Pro and Firm.
— Related
- Offshore bond tax calculator — the same gain with no basic-rate credit
- Top-slicing relief calculator — the five-step relief working in full
- Chargeable event gain calculator — work out the gain first
- Pension vs ISA vs bond tax comparison — for a future wrapper choice
- Full bond TSR workbench — multiple gains, final-year rule, certificate reconciliation (free account)
For planning and illustration purposes only · Verify all inputs against source documents · This tool does not constitute financial or tax advice.