Personal Tax- 2022 onwards Chargeable Event Gain, Top Slicing Relief - Silver Case
Article ID
personal-tax-2022-onwards-chargeable-event-gain-top-slicing-relief-silver-case
Article Name
Personal Tax- 2022 onwards Chargeable Event Gain, Top Slicing Relief - Silver Case
Created Date
15th November 2022
Product
Problem
IRIS Personal Tax- 2022 onwards Chargeable Event Gain, Top Slicing Relief/Notional tax and Personal Allowance - Silver Case
Resolution
If the client has Top slicing relief/Notional tax calculations on the Tax Comp and there is an abatement of Personal allowance.
HMRC and IRIS Personal Tax have now updated their systems with the correct calculations: Personal Tax matches the HMRC tax calculations and Personal Tax is correct and follows all HMRC tax rules.
As we have tested multiple users PT calculations who wanted to query the tax calculation and they have always matched the HMRC Test case generator and our Development team has also confirmed PT is following HMRC rules.
If you want to query the PT calculation of tax then you will need to contact HMRC support.
HMRC has provided this statement: As you can see from the Policy Paper published in March 2020, the Personal Allowance is only reinstated for the calculation of TSR itself, and not for the overall tax liability for the year. In the example you attached, based on their total income for the year they are not entitled to any personal allowance. However, at stage 17 of the calculation, at box c17.38.1 you can see that the personal allowance has been recalculated and given as £12,500, for the purposes of the TSR calculation. However, this would not show for your users – it is only apparent in the background calculation. They will not see any difference on their SA302.’
Use the HMRC Test Case generator and you have 2+ Chargeable events – on the ‘AOI’ page/tab to allow you enter the values, DO NOT complete box 4 and instead click MULTIPLE GAINS and enter each event separately, this will auto populate Box 4 and provides the correct calculation. If you instead enter it as a single total you may get a different calculation not matching PT.
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