Top-slicing relief calculator

The full five-step computation, including the post-2021/22 Personal Savings Allowance recalculation (IPTM3820) most tools skip.

— Inputs

Gain, years, income.

Chargeable event gain

From the certificate, or the chargeable-event-gain calculator.

Complete years (N)

Relevant years for slicing — usually on the certificate.

Non-savings income (gross)

Salary, pension, self-employment, rental — gross, before the personal allowance.

Other savings income

Interest only — excludes dividends and the bond gain.

Dividend income

Taxed at the dividend rates as the top slice. Excludes the bond gain.

RAS pension contributions (gross)

Total member relief-at-source contributions across every scheme in this tax year, grossed up. Extends the rate limits both in the client's actual liability and inside the top-slicing calculation (FA 2004 s.192(4)).

Gift Aid donations (grossed up)

Qualifying Gift Aid only: cash donated plus the basic-rate tax the charity reclaims (normally cash × 1.25). It still extends the rate limits in the client's actual liability (ITA 2007 s.414(2)), but is ignored inside the top-slicing calculation (ITTOIA 2005 s.535(7)) — which is why it is entered separately from the pension contributions. If there were none, enter 0 to record that.

Bond type

Changes the net tax, not the relief. The credited-onshore lane reduces the real liability; the ordinary offshore lane does not. The certificate's separate tax-treated-as-paid answer below decides whether that lane is supported — bond type alone does not prove the s.530 credit.

Tax year of the event

Drives the bands, PSA and allowances — versioned per-year config.

Need the gain first? Run the chargeable event gain calculator and bring the figure here.

Illustration — worked example. Confirm the two certificate/scope points below to use your own figures.

Top-slicing relief

£5,846

Net additional tax due after relief and the 20% onshore credit: £1,954.00

The five steps

Real-main tax payable with full gain — before TSR£13,286.00

Relief basis · full-gain subtotal (without-gain tax + attributable tax)£11,332.00

Relief basis · tax without the gain£5,486.00

Tax attributable to the gain£5,846.00

3 · Annual equivalent (gain ÷ 8)£5,000.00

4 · Tax on slice at notional income£0.00

Relieved liability (× 8)£0.00

5 · Relief (attributable tax − relieved liability)£5,846.00

The PSA recalc — watch it move

PSA at Step 3 (full income + gain): £500.00
PSA at Step 4 (notional income + slice): £1,000.00

The Step-4 PSA is larger than Step 3’s — the IPTM3820 recalculation at notional income level is doing real work in this case. A tool that carries Step 3’s PSA into Step 4 understates the relief.

The real main calculation has allocated the personal allowance in the way that gives the lowest s.23 income-tax liability (ITA 2007 s.25(2)); it also keeps the credited gain as the highest part under ITTOIA 2005 s.465A / ITA 2007 s.1012. The s.530 credit is tax treated as paid after that liability is calculated. The separate top-slicing-relief working still sets allowances against other income first as ss.535–537 require. HMRC’s online Self Assessment calculator has documented allowance-allocation exclusions for some gain/dividend shapes; reconcile any different online figure against the statutory allocation and consider the documented paper-return route.
This calculation assumes the member made no personal (relief-at-source) pension contributions or Gift Aid donations this year. If they did, the basic and higher rate limits are extended by the grossed-up amount (FA 2004 s.192(4); ITA 2007 s.414(2)), which can change the personal savings allowance and starting-rate-for-savings banding of the gain and lower the tax due. Supply the grossed-up total to compute the exact figure.

IPTM3820 · HMRC Agent Update 83 (2021)

Confirm before relying on this

Income tax treated as paid?

Confirm the chargeable-event certificate's exact “income tax treated as paid” Yes/No entry for every gain. Bond type alone does not prove the ITTOIA 2005 s.530 credit.

Time-apportioned reduction check

This calculator does not calculate a time-apportioned reduction (TAR). Confirm that no TAR is due for every gain and policy included in this calculation after checking the relevant residence, beneficial ownership or assignments, security, and trust or estate history. If you cannot confirm that, do not use this calculator for the final tax or top-slicing figure.

I confirm that no time-apportioned reduction is due for every gain and policy included in this calculation after checking the relevant residence, ownership or assignment, security, and trust or estate history.