Personal Tax Chargeable Event Gain - Silver Case.

Article ID

personal-tax-chargeable-event-gain-silver-case

Article Name

Personal Tax Chargeable Event Gain - Silver Case.

Created Date

4th January 2021

Product

IRIS Personal Tax

Problem

Personal Tax Chargeable Event Gain - Silver Case

Resolution

The situation reported below falls under HMRC Exclusion ID: 116 (Silver Case). Please click on the link below for further guidance.

How will The Silver Tax Case change the Top Slicing Relief calculation?

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/934223/2019-2020_Excl-Indiv_v4.0.pdf

It was announced at The Budget (11th March 2020) that legislative changes would be made regarding the calculation of Top Slicing Relief (TSR). The new measure will introduce new rules allowing reduced personal allowances to be recalculated within the calculation for TSR. This will provide additional relief for taxpayers whose entitlement to the personal allowance has been reduced because a gain has been included as part of their income of the year. These new rules will apply to gains arising on or after 11th March 2020. However, we will also apply these new rules to all gains arising in 2019/20 as a concessionary treatment.

How will this be implemented into the software?

HMRC have published this scenario as Exclusion ID: 116. This will enable affected customers to receive a correct calculation from HMRC for 2019/20. HMRC Will also be applying the new calculation to customers who have reported gains in their 2018/19 returns and they too will receive a corrected calculation. For returns submitted for 2020/21 onwards, the software will be updated and the calculation for Top Slicing Relief will be calculated automatically.

We have made any changes to our 2019/20 calculator. However, the exclusion will only appear if there is one chargeable event gain. If you have more than one (multiple) chargeable event gains, you will not encounter the Exclusion ID: 116 validation message. This is because HMRC have not provided the complete triggers in regards to this scenario. This issue will be correct in Version 21.1.0, which is due to be released in April 2021.

So therefore, if you do fall under the HMRC Exclusion ID: 116 (Silver Case) – you will need to submit the Personal Tax return (SA100) by paper/post.

If you need to submit by post – attach this form https://www.gov.uk/government/publications/self-assessment-reasonable-excuse-for-not-filing-return-online so you will not be penalised.