Chargeable Event Gain & S552 Certificate

gallygirl

Am confused by a letter we have received from a co. we have just cashed in a PIP with.

It says OH has 'chargeable event gain' of £1075.07 & says it should be reported on OH's tax return. They have enclosed a 552 Certiifcate which shows £1075 as amount of gain, the 'treated as paid' box states Yes and the 'amount of tax treated as paid' is £215, i.e. 20%.

I'm assuming, as this is well below the CGT threshold, unless he has other CG this tax year he won't have to bother with a tax return? And the original co have not deducted £215 from his settlement (info provided by them was v sketchy)?

Thanks.

Cook_County

gallygirl wrote: »

Am confused by a letter we have received from a co. we have just cashed in a PIP with.

It says OH has 'chargeable event gain' of £1075.07 & says it should be reported on OH's tax return. They have enclosed a 552 Certiifcate which shows £1075 as amount of gain, the 'treated as paid' box states Yes and the 'amount of tax treated as paid' is £215, i.e. 20%.

I'm assuming, as this is well below the CGT threshold, unless he has other CG this tax year he won't have to bother with a tax return? And the original co have not deducted £215 from his settlement (info provided by them was v sketchy)?

Thanks.

The £215 is a notional amount representing tax by the insurance company on its investments.

wakeupalarm

I think it should be treated as income and not capital gains? The gross figure of £1075.07 is added to your income. Only really becomes an issue if you are around the 40% tax figure.

BoGoF

It is also an issue for age related personal allowance in that the chargeable event is taken as income for calculating income for age allowance purposes.