2:2 Gift aid and personal pension

Question 1

What payments qualify for relief at basic rate?

Answer 1

Payments must be to charity and to their personal pension

Charity and pension fund are both able to reclaim the basic tax rate from the Government e.g. you pay £100 and the charity can claim extra £25 because £100*100/80 = £125

Question 2

Who receives the tax relief?

Answer 2

Basic rate payers don’t receive this relief

But higher rate taxpayers do because this relief expands the basic tax rate band for them which means that more of their income is taxed at 20% rather than 40%