Chargeable Event arising from death

[keihal]

As Executor and personal representative of my late father, I am trying to complete a tax return issued in relation to Chargeable Events. Despite making a considerable effort to understand the process relating to Chargeable Event Certificates I am confused and would appreciate advice.

A single investment of £10,000 was made on 14 March 1985.
No trust or other instrument was used.
Partial withdrawals of £250 were taken twice yearly until April 2013.
No further withdrawals were taken.
My father died in November 2019.

Chargeable event certificates were issued for each tax year from 2 April 2013 (year 2012 – 2013) to 2019 and a final Chargeable event certificate issued in January 2020 following his death.

The yearly Chargeable event certificates all refer to the same two events, which were withdrawals of £250 on 13th March 2013 and 2014. I believe these were the final two regular (six-monthly) withdrawals, after which no further withdrawals were made. My understanding is that no tax was due on these withdrawals so I don’t know why Certificates were issued for these two events but not for previous events.

The final chargeable event certificate issued the day after his death, has the following information:
Number of relevant years : 34
Income tax treated as having been paid: yes
Amount of tax treated as having been paid: £7,301
Gain : £36,509.52
Assessment in tax year: 2019/20.

I need to complete HMRC form SA101 Additional Information. I think I have to enter the Gain (£36,509) in box 4. I have to enter 'the number of years the policy has been held or since the last gain' in Box 5. The last gain appears to have been in 2014, so should enter ‘6 years’ in box 5? I don’t understand how the tax liability arising from this investment is calculated as no other information is required about the earlier event, nor is the time the investment was held taken into account.

[maths]

This is a very complex area and it's not possible to indicate on information what the tax charges should be.

Basically by withdrawing £500 each policy year no income tax would have arisen in those tax years ie for the first 20 years of ownership ie to 14.3.05.

By 14.3.05 the whole of the initial £10,000 investment would have been withdrawn. Any withdrawals thereafter would in principle be subject to income tax depending upon taxpayer's own circumstances and whether bond was onshore or offshore.

I wouldn't worry too much about being too exact on the SA101. HMRC will probably have all the relevant info to work out any income tax charges.

[keihal]

Thanks, maths, I thought it was a complicated area! I'll put 6 years in box 5 and a comment in the notes field at the end.