The chargeable event regime taxes gains on a realisations basis, rather than accruals basis. Some taxpayers may benefit from this, for example where their gain is deferred to a time when they have less taxable income, such as in retirement. However, other taxpayers may be disadvantaged when the growth that accrued over the duration of their policy is all brought into charge in a single tax year. To mitigate the impact of this, top slicing relief may be available. Its effect is to reduce, in some circumstances, the rate of tax charged on the gain by applying a spreading mechanism.

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