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The calculation of the chargeable amount for a tax year (year X) is made in accordance with steps (1)–(5) below. The calculation is amended form 6 April 2025, by Finance Bill 2025¹.

1. Ìý

   (1)ÌýÌýÌýÌý Identify the amount or value of the benefits for year X and any previous tax years for which conditions (a)–(d) in E1.1117 are met in relation to the relevant transfer or associated operations. See E1.1130 as regards valuation of benefits. The sum of those amounts and values is the total benefits

2. Ìý

   (2)ÌýÌýÌýÌý Deduct from the total benefits in step (1) the total amount of income treated as arising to the individual under section 732(2) for earlier tax years as a result of the relevant transfer or associated operations (but see the exception below for 2017/18 to 5 April 2025). The result is the total untaxed benefits

3. Ìý

   (3)ÌýÌýÌýÌý Identify the amount of 'relevant income' of year X in relation to the individual. Relevant income is income which arises