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HMRC internal manual

Insurance Policyholder Taxation Manual

HM Revenue & Customs
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Interaction between restricted relief qualifying policies and top slicing relief

Restricted Relief Qualifying Policies (RRQPs)

If an individual has made a chargeable event gain, they will receive a chargeable event certificate from the insurer. However, some individuals will be entitled to relief on this gain, for example a time apportioned reduction, top slicing relief or because the policy is a RRQP. For more information on RRQPs, see IPTM2076.

Any time apportioned reduction due is applied to the gain calculated by the RRQP rules.

Top Slicing Relief


For further information on top slicing relief, see IPTM3820 - IPTM3850.

Top slicing relief, on gains made before 6 April 2013, is given by reference to a number ‘N’. N is the number of complete years from the issue of the policy less the number of complete years in which the policyholder was not resident in the UK. N is then used to calculate the top slicing relief. See IPTM3840.

From 6 April 2013, top slicing relief is given by dividing the number of foreign days in the material interest period by 365. If this number is not a whole number, it is rounded down. This is then deducted from the number of full years on which top slicing relief is calculated.

Order of Relief

The gain is reduced in the following order:

  1. RRQP
  2. Time apportioned reduction
  3. Top slicing relief.



Clive makes a chargeable event gain of £50,000 on a policy that is a RRQP.

The reduction in the gain due because the policy is a RRQP is £5,000.

The time apportioned reduction is £10,000.

The top slicing relief due is £6,000.

The gain liable to tax is therefore:

Total gain £50,000
RRQP (£5,000)
RRQP relieved gain £45,000
Remaining gain £45,000
TAR (£10,000)
TAR relieved gain E35,000
Remaining gain £35,000
Top slicing relief (£6,000)
Gain liable to tax £29,000