Ways to avoid high tax on one-off sums

If you received an ‘exceptional’, one-off sum in 2025 that could push you into a higher tax band / bands than usual, you may be able to benefit from a mechanism known as the quotient system.

An ‘exceptional’ sum means a large sum you would not usually expect to receive, such as a one-off bonus from your employer, money from publishing a book if this is not your usual way of earning a living, etc. Certain kinds of income are excluded, for example gains from managing a portfolio of shares, though a one-off large gain from selling some shares may apply if this is not something you habitually did in previous years. 

The income in question should usually be larger than your average income in the last three years, however this does not apply to certain sums linked to work such as compensation money for being laid off (or related to leaving work voluntarily), a work bonus to help with moving costs or certain pay-outs to help those on very low pensions.

Revenus différés

Sums called revenus différés also qualify for the quotient, whatever their amount. This refers to income you were due in a given year but which was not paid to you until another year for reasons out of your control and despite you having taken reasonable measures to request payment on time. An example could be if a tenant pays you months of back rent that was due.

Quotient system

If you received an exceptional sum, you can opt to use the quotient system (this is not to be confused with the ‘family’ quotient relating to the parts system). To do this you: 

Work out your tax payable without inclusion of the exceptional sum – A Find tax payable if you add in one quarter of the exceptional sum – B Find the difference between the two figures above, and multiply it by four – C Add C to A to give you the tax payable 

This means you deal with tax on the exceptional sum in one go and, unless you already pay in the top tax bands, the system may help to limit tax rises linked to income moving into the higher bands. Sums that you want to declare under the quotient go only in box 0XX on the 2042C. 

Explain the nature of the income and why it qualifies for the quotient in the space provided. It is possible to check the effect of the quotient by using the tax office’s tax simulator.