Judges (as representative for the Late R Young) v HMRC

In Judges (as representative for the Late R Young) v HMRC [2022] UKFTT 77 (TC) (18 February 2022) the FTT allowed the taxpayer’s appeal concerning the encashment of a life insurance policy ruling that when calculating top slicing relief on a chargeable event gain in this particular case that predates a subsequent change in law there was an entitlement to allocate personal allowances against various sources of income in a way that achieved the lowest liability to income tax.

A gain of £223 000 arose in 2017/18 the year of the taxpayer’s death. The facts thus preceded the changes made by FA 2020 to the top slicing calculation set out in ITTOIA 2005 s 535 and s 536. The difference between the taxpayer’s and HMRC’s calculations amounted to nearly £45 000. The FTT acknowledged that the result advocated by the appellant was a very generous one but nevertheless allowed...