Foreign chargeable event gain and self assessment

leonag

Hi

My father in law usually does his own returns, (it's just his pension and savings income) but this year he has had a £7000 chargeable event gain on a foreign investment.

I've told him this needs to go into box 43 on the foreign pages. The problem is this, he says that from just his pension and savings the calculator tells him he is owed a little tax back (just a few pounds), but when he inputs his £7000 it tells him he owes £1800. 20% of £7000 is £1400. I haven't looked at his figures yet he's coming this afternoon, but I was wondering if anyone has any ideas on what's happening so I don't appear a complete idiot.

As far as I'm aware his income doesn't take him into the higher tax band.

I know I'm missing something really simple and obvious, but I'm having a complete blank moment.:confused1:

Thanks

Fingersan

Hi Leonag

Without seeing the paperwork it is a bit tricky to give advice on this, but I am guessing that there may be some notional tax to consider. If you see the chargeable gain certificate keep a look out for this as this would effectively be a 20% tax credit on the income.

Good luck.

leonag

Well it was a simple solution. His personal allowance came down from £9940 to £7475 as he was over the £24000 bracket, so that accounted for the difference in tax.

What he hadn't noticed though were the comments underneath his calculation telling him he needed to pay an additional £930 on account, sending total tax due to £2700.Good job he did check it with me as he was just going to pay the £1800. He's going to ask them to cancel his payments on account as this is a one off year and he doesn't usually have to pay tax at all.

Thanks

Leona