On-Demand Events
Session 005: Calculating the tax liability individuals and non-bare trusts
11 Mar 25 5 min read
Since the 2022 Autumn Statement there’s been an increased demand for information about onshore and offshore bonds. In response to this, we’ve designed six bite-sized sessions covering the basics of bonds and some of the more technical aspects like taxation.
This is the fifth session of the six-part series.
Barrie Dawson (Senior Technical Manager, M&G)
Neil Macleod (Senior Technical Manager, M&G)
In this session we look at tax calculations for individuals and non-bare trusts, top-slicing relief, deficiency relief and time apportionment relief.
60 minute video (approximately) I Structured CPD accredited by CII and CISI
Learning outcomes
By the end of this session, you will be able to:
- Calculate the tax liability for individuals and non-bare trusts
- Understand the mechanics of top-slicing relief, deficiency relief, time apportionment relief and when they'll apply
Claiming your CPD
To claim your CPD certificate, test your knowledge with the questions below.
Write down your answers to each of the following questions and check your answers when you click to claim your CPD certificate on the link below
After the personal allowance, Joe’s taxable salary is £15,000. He fully surrenders an offshore bond held for five complete years which triggers a £30,000 gain. Which of the statements is false?
A) The basic rate tax credit at Step 6 of the income tax calculation will be £6,000.
B) When taxing the full gain in the top-slicing calculation the basic rate tax credit will be £1,200.
C) When taxing the full gain in the top-slicing calculation his PSA will be £500.
D) When taxing the slice in the top-slicing calculation his PSA will be £1,000.
Sue surrenders an onshore and offshore bond in the same tax year realising gains of £30,000 and £35,000 respectively. Both bonds were held for 10 complete policy years. What is the top-slicing factor (N) in the top-slicing calculation?
A) 10.
B) 20.
The trustees of the XYZ family discretionary trust surrender an onshore bond triggering a gain of £40,000 in the 2024/25 tax year. The bond was held for five complete policy years. The sole Settlor died four years ago. Which of the following statements is true?
A) The top-slicing factor (N) will be five.
B) The trustees will pay will pay £18,000 to HMRC.
C) The trustees will pay £10,000 to HMRC.
D) The beneficiary will receive a 45% tax credit for income tax paid by the trustees.
Which of the following is not taken into account for Adjusted Net Income purposes?
A) Employment income.
B) Dividend income.
C) Top-sliced bond gains.
D) Relief at Source pension contributions.
After the personal allowance, Joe’s taxable salary is £15,000. He fully surrenders an offshore bond held for five complete years which triggers a £30,000 gain. Which of the statements is false?
A) The basic rate tax credit at Step 6 of the income tax calculation will be £6,000.
B) When taxing the full gain in the top-slicing calculation the basic rate tax credit will be £1,200.
C) When taxing the full gain in the top-slicing calculation his PSA will be £500.
D) When taxing the slice in the top-slicing calculation his PSA will be £1,000.
Sue surrenders an onshore and offshore bond in the same tax year realising gains of £30,000 and £35,000 respectively. Both bonds were held for 10 complete policy years. What is the top-slicing factor (N) in the top-slicing calculation?
A) 10.
B) 20.
The trustees of the XYZ family discretionary trust surrender an onshore bond triggering a gain of £40,000 in the 2024/25 tax year. The bond was held for five complete policy years. The sole Settlor died four years ago. Which of the following statements is true?
A) The top-slicing factor (N) will be five.
B) The trustees will pay will pay £18,000 to HMRC.
C) The trustees will pay £10,000 to HMRC.
D) The beneficiary will receive a 45% tax credit for income tax paid by the trustees.
Which of the following is not taken into account for Adjusted Net Income purposes?
A) Employment income.
B) Dividend income.
C) Top-sliced bond gains.
D) Relief at Source pension contributions.
Before collecting your certificate, please take a moment to provide us feedback on this session, please email prudential.distribution.team@prudential.co.uk
Complete the form below and we’ll email your CPD confirmation to you. Please use the email address that you would usually use when contacting us.
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