I have a client and for the 2019-20 tax year has £23,000 non chargeable event income and a chargeable event of £97,500 (23 years) the top slicing calculation appears to reduce the amount of personal allowance available. I was under the impression that after 11 March 2020 the personal allowances remained in full and if I follow the example in HMRC Insurance Policyholder Taxation Manual 3850 I get e figure of Top Slicing Relief approx £2k lower than Sage Taxation v23 Update 1 calculates. Which impacts on the tax position of the individual. This case is a deceased taxpayer died in Jan 2020. My concern is that if I tell the executors tax due is £3,000 and then HMRC recalculate the tax on the gain and say it is £5,000 may well be that the executors will not have the funds to pay the £2,000 as it will have been distributed.
Are Sage 100% certain that the calculation in the software is correct as HMRC advise that the changes implimented 11 March 2020 apply to all gains in the 2019-20 tax year?