Every month we go through our CeMAP forums at http://www.cemap123.co.uk (which our students have access to as part of their CeMAP Training programme) to see what interesting queries have been 
posted.
Here is this months CeMAP query from Dave S:
Question:
Hello,
Can anyone please explain top slicing in plain English, perhaps with an example of how it would be calculated in a real life situation?
Dave
Hi Dave
Top slicing – The good news is that for CeMap you won’t be required to work out top slicing – it can be too complicated !!!
Essentially, with an Investment Bond, whereas one would think that any gain from the Bond would be subject to Capital Gains tax, it is in fact subject to income Tax!! The capital gain is calculated and then divided by the number of years that you have held the Bond – this is then added to your income over the preceding years. Too complicated – don’t need to know it – just remember that any gain is subject to income tax and not CGT.
Hope this helps
David Airs
CeMAP Trainer
That’s a relief! Thank you David.
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