Does a bare trust get top-slicing relief?

Yes. Under a bare trust the beneficiary is treated as the individual liable for the gain, so an individual beneficiary can claim top-slicing relief on their own income and allowances, just as if they held the bond directly.

Do personal representatives get top-slicing relief?

No. Where personal representatives are assessed on a chargeable event gain — for example a bond continuing after the policyholder’s death — the gain is charged at the basic rate with no top-slicing relief.

Investment bonds · Top-slicing relief

Can trustees claim top-slicing relief?

Top-slicing relief is given to individuals. While the settlor of a non-charitable trust is alive and UK resident, the bond gain is normally taxed on the settlor, relief included. Only where UK trustees are the person liable does the relief fall away.

3 min read · Last reviewed 23 Sept 2026

— In short

Generally no, but trustees are often not the person taxed. Top-slicing relief is an individual's relief (ITTOIA 2005 s.535), and while the settlor of a non-charitable, non-bare trust is alive and UK resident the gain is normally taxed on the settlor (s.465(3)), who can claim it. UK trustees are liable, with no relief, where the trust is charitable, where the settlor died in an earlier tax year or is non-UK resident, or where no one else is chargeable (s.467; IPTM3230).

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Generally, no — but trustees are often not the person taxed. Top-slicing relief is an individual's relief: ITTOIA 2005 s.535 gives it to “an individual” liable to income tax on a chargeable event gain. While the settlor who created a non-charitable, non-bare trust is alive and UK resident, the gain is normally taxed on the settlor, who can claim the relief. A charitable trust is different: the UK trustees are liable even while the settlor is alive and UK resident (s.467(2); IPTM3230). The bond calculators do not model charitable trusts.

Who is “liable” matters

Top-slicing relief follows the person chargeable to tax on the gain, and the chargeable-event rules set out who that is (ITTOIA 2005 ss.465–467):

Top-slicing relief by who is liable for the gain (ITTOIA 2005 ss.465–467; IPTM3250 trusts, IPTM3230 UK trustees, IPTM3240 death cases)

An individual who owns the bond (incl. a bare-trust beneficiary): Relief available
Settlor of a non-charitable, non-bare trust, alive and UK resident (s.465(3)): Settlor is taxed — relief available
UK trustees — where the trust is charitable, the settlor died in an earlier tax year or is non-UK resident, or no one else is chargeable (s.467; IPTM3230): No relief
Personal representatives of an estate (s.466): No relief

For a bond held on a non-charitable, non-bare trust, the default is that the settlor — the individual who created the trust — is chargeable (s.465(3); IPTM3250), whether or not they can benefit. As an individual, the settlor gets top-slicing relief on their own income position, and can recover the tax from the trustees (s.538). UK trustees of that non-charitable trust can instead be liable where the settlor died in an earlier tax year or is non-UK resident, or where no one else is chargeable (s.467; IPTM3230). A gain on an event after a UK-resident settlor's death but in the same tax year is taxed on the deceased settlor (IPTM3240). The non-charitable trust is then taxed at the trust rate with no top-slicing relief: the relief is computed by reference to an individual's income and allowances, which a trust doesn't have. UK trustees of charitable trusts are liable under the separate rule in s.467(2), including where the settlor is alive and UK resident (IPTM3230); they cannot claim top-slicing relief either. A bare trust is different again: the beneficiary is treated as the person liable, so an individual beneficiary can claim relief on their own income position. For personal representatives assessed on a gain (a bond that continues after death, say), the charge is at the basic rate with no top-slicing relief.

Who is liable changes the tax, not just the administration. Take a worked offshore case: a £60,000 gain before any TAR over six complete years, for someone with £35,000 of other income (all non-savings, such as salary) in 2025/26, attracts £8,846 of top-slicing relief when it is taxed on an individual — including a living, UK-resident settlor of a non-charitable discretionary trust. The figure depends on that income and that tax year, and is not a property of the gain alone. If the settlor died in an earlier tax year or has left the UK, the same gain is taxed on the trustees at the trust rate with no slicing. The five-step relief, for the cases where it is available, is on the top-slicing relief calculator; how the gain itself is computed is on the chargeable event gain calculator. For the mechanics of the relief, see how to calculate top-slicing relief.

Worked-example basis: No time-apportioned reduction is due for any gain or policy shown. TAR is not calculated or applied. Raw gains are shown before any TAR.

ITTOIA 2005 s.535 (relief for individuals) · ITTOIA 2005 s.465(3) (settlor liable) · ITTOIA 2005 s.467 (UK trustees liable) · IPTM3250 (trusts) · IPTM3230 (UK trustees) · IPTM3240 (death cases — personal representatives and the settlor’s year of death)

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Common questions

Can trustees claim top-slicing relief?: Generally no, but trustees are often not the person taxed. While the settlor of a non-charitable, non-bare trust is alive and UK resident, the gain is normally taxed on the settlor (ITTOIA 2005 s.465(3)), who can claim top-slicing relief. UK trustees are liable where the trust is charitable, where the settlor died in an earlier tax year or is non-UK resident, or where no one else is chargeable (s.467; IPTM3230), and then get no relief.
Does a bare trust get top-slicing relief?: Yes. Under a bare trust the beneficiary is treated as the individual liable for the gain, so an individual beneficiary can claim top-slicing relief on their own income and allowances, just as if they held the bond directly.
Do personal representatives get top-slicing relief?: No. Where personal representatives are assessed on a chargeable event gain — for example a bond continuing after the policyholder’s death — the gain is charged at the basic rate with no top-slicing relief.
Why does it matter who holds the bond?: Because the relief follows the person liable for the gain. The same gain can attract substantial top-slicing relief when it is taxed on an individual, including a living UK-resident settlor, and none when UK trustees are liable because the settlor died in an earlier tax year or is non-resident.

Sources

Based on ITTOIA 2005 ss.465–467 and s.535, and HMRC’s Insurance Policyholder Taxation Manual — IPTM3250 (“person liable to charge: summary of the position in relation to trusts”) for the trust cases, IPTM3230 (“person liable to charge: UK resident trustees”) for when UK trustees are liable and at what rate, and IPTM3240 (“person liable to charge: death cases”) for the personal-representative case this article also covers and for a gain in the settlor’s year of death.

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