CGT and with-profits

System

Great, thanks all for your help

nomunnofun

jimmo wrote: »

Age allowance is calculated by reference to income and the full amount of the chargeable event gain.

Top slicing relief is then calculated by reference to rates of tax only. Age allowance is not reworked in the top slicing relief computation.

http://www.hmrc.gov.uk/manuals/iptm/IPTM3820.htm

Thanks jimmo - once upon a time I knew that ??

xylophone

note that the links above appear to indicate a basic rate of 22% - old articles perhaps?).

Pru link (post 2) dated March 2012 has a section
"Entitlement to Basic Personal Allowances, Age Related Personal Allowances,
Working Tax Credit and Child Tax Credit"

nomunnofun

xylophone wrote: »

Pru link (post 2) dated March 2012 has a section
"Entitlement to Basic Personal Allowances, Age Related Personal Allowances,
Working Tax Credit and Child Tax Credit"

Yes - my memory cells have truly clicked into gear on the age allowance aspect. However. the point that I was making was that the other links suggest additional tax, if higher rate, at 18% i.e. 40% less 22%. Unless I have missed something?

When cashing in the bond, higher-rate taxpayers pay a further 18% on the total profit the bond has made. If you are on the borderline between basic and higher-rate tax, then the profit on the bond may take you into the higher tax band and you will have further tax to pay.